Maybe. Under the ACA’s employer mandate, which applies to employers with 50 or more employees in the prior calendar year, there is no general exception for interns for medical coverage. All hours of service for which an intern is paid are required to be counted as hours of service. Therefore, interns’ hours of service must be counted when determining if the employer is responsible for offering coverage to the interns, or the employer risks paying a penalty under the employer mandate.  

In some cases, an intern may fall into a “seasonal” employee classification. A seasonal employee is one whose customary annual employment does not exceed six months and whose work begins and ends at approximately the same time each year. Interns meeting the seasonal employee definition may then be placed in a look-back measurement period and not offered coverage until the completion of such period and if they averaged full-time hours. However, if the intern does not meet the seasonal definition, then the seasonal exception will not apply. Putting it all together, if the interns do not meet the seasonal employee definition and are hired to work 30+ hours, they should receive an offer of coverage within 90 days of hire to be compliant with the ACA and thus would be included in ACA reporting.  

Small employers that are not subject to the employer mandate would not be subject to the seasonal employee measurement method rules mentioned above. Instead, eligibility would be determined based on how eligibility is defined under the terms of the plan. Similarly, for benefits outside of medical coverage, it also would come down to how eligibility is defined under those component benefit plans. A plan could restrict interns or nonpermanent or short-term positions from eligibility if desired. Employers would need to work with the carrier or TPA on the eligibility criteria and properly document and communicate it to affected individuals.  

Anytime employers vary benefit eligibility by employee class, they should ensure the plan undergoes nondiscrimination testing to ensure any variance does not create a discriminatory plan design under IRC Section 125 and, for self-insured plans, Section 105(h). 

For further information on determining full-time employee status for employees with nontraditional work schedules, PPI clients can download a copy of our publication, ACA: Employer Mandate Full-Time Employees, from the Client Help Center.