Guides
Benefits for part-time and seasonal workers: ACA and eligibility rules
When part-time, seasonal and variable-hour employees count under the ACA employer mandate, how look-back measurement works, and what else you must offer them.
Employers do not have to offer health coverage to every part-time or seasonal worker, but the federal ACA employer mandate counts anyone averaging 30 or more hours of service a week as full-time, and an employer with 50 or more full-time employees including full-time equivalents has to offer coverage to at least 95% of them or risk a penalty. Plan eligibility terms, state law and retirement-plan rules add other obligations, so the answer depends on hours, the type of worker and where they work.
The ACA test: who is full-time
Under the regulations at 26 CFR 54.4980H-1, an employee is full-time if he or she averages at least 30 hours of service per week, and 130 hours of service in a calendar month is treated as the monthly equivalent. An employer is an applicable large employer (ALE) if it averaged at least 50 full-time employees, counting full-time equivalents, in the prior calendar year. That is the threshold that matters for The ACA employer mandate: who must offer coverage and the 2026 penalties penalties.
For 2026, the IRS set the section 4980H(a) amount at $3,340 per full-time employee (minus the first 30) and the 4980H(b) amount at $5,010 per full-time employee who gets a premium tax credit (IRS Rev. Proc. 2025-26). Coverage is affordable for 2026 plan years if the employee's share of the lowest-cost self-only plan that meets minimum value is no more than 9.96% of household income, tested using a safe harbor (Rev. Proc. 2025-25). The ACA employer mandate (ALE) calculator runs the arithmetic.
Part-time employees who average fewer than 30 hours are not full-time for these purposes. But their hours still count toward the full-time-equivalent calculation that decides whether you are an ALE: add the monthly hours of service of all non-full-time employees (up to 120 each) and divide by 120.
Seasonal employees and the seasonal-worker exception
Two different definitions matter, and employers mix them up.
- Seasonal employee (for the look-back method): one hired into a position for which the customary annual employment is six months or less. This is what lets you use a longer measurement period to decide whether a person is truly full-time.
- Seasonal worker (for counting whether you are an ALE): a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including retail workers employed exclusively during holiday seasons. An employer can apply a reasonable, good-faith interpretation. Under section 54.4980H-2, an employer whose headcount is over 50 full-time employees for 120 days or fewer (four months) in a year, and only because of seasonal workers, is not an ALE for that year.
A ski resort, landscaper, tax-prep shop or garden center can fall into either bucket, or neither, depending on how the hours run. Document the reasoning each year.
Measuring variable-hour and seasonal staff
You can use a monthly measurement method, which tests hours month by month, or the look-back measurement method, which lets you fix status for a stability period based on a prior measurement period. Look-back is designed for variable-hour and seasonal employees.
| Item | Rule (26 CFR 54.4980H-1) |
|---|---|
| Initial measurement period (new variable-hour or seasonal staff) | 3 to 12 consecutive months, chosen by the employer |
| Standard measurement period (ongoing staff) | 3 to 12 consecutive months |
| Administrative period | No longer than 90 days after a measurement period |
| Variable-hour employee | Hours are variable or otherwise uncertain at hire; look-back only |
A person who averages 30 hours or more during the measurement period is treated as full-time through the stability period that follows, regardless of actual hours then. A person who does not is treated as part-time through the stability period. Choose periods that match your seasons and apply them consistently to categories of employees. The details go on the Forms 1094-C and 1095-C; see ACA reporting: Forms 1094-C and 1095-C for large employers.
A worked example (hypothetical)
Say a 70-employee lawn and snow company in Minnesota has 30 year-round employees and 40 seasonal hires. For ongoing staff it uses a 12-month standard measurement period starting each October 15 and a 12-month stability period. For new variable-hour hires it uses a 6-month initial measurement period with a 60-day administrative period. A snowplow driver hired in November is placed in the initial measurement period. If the driver averages 33 hours a week over those six months, the company must treat the driver as full-time for the stability period that follows, even if hours later drop to 20. If the company offers coverage to fewer than 95% of its full-time employees, the 4980H(a) penalty could apply across the whole full-time count, so a few missed hires can cost far more than the coverage would have. This is an illustration only.
What else applies to part-time and seasonal workers
Beyond the mandate:
- Plan eligibility. Your plan document can set a waiting period, but under the ACA it cannot exceed 90 days, and eligibility based on hours worked per week is allowed only within the ACA's limits. A plan can exclude employees who work under a stated number of hours, but the exclusion should not push you below the 95% offer threshold if you are an ALE.
- COBRA. Part-time employees covered under the plan have COBRA rights. Employees who lose coverage because their hours drop are a qualifying event.
- Nondiscrimination. Self-insured plans and cafeteria plans have nondiscrimination rules that can be affected by who is excluded.
- Retirement plans. The SECURE Act and SECURE 2.0 require 401(k) plans to admit long-term part-time employees who meet an hours test over consecutive years. The rules are changing; ask your plan advisor.
- Paid leave and sick time. Many states and cities require paid sick leave for part-time and seasonal workers and have paid family leave programs funded by payroll premiums. See state disability and paid family leave programs: every mandate in 2026 and workers' comp and benefits requirements by state. Hawaii separately requires employers to offer health coverage to employees who work 20 or more hours a week.
- Workers' compensation. Part-time and seasonal employees are generally covered employees. They count in payroll for premium audit; check insurance for seasonal businesses for how seasonal payroll interacts with audits.
Alternatives to a group plan for part-timers
Some employers carve part-timers out of the group plan and offer a defined contribution through an ICHRA, which can be offered to classes such as full-time, part-time and seasonal employees, subject to the rules in 26 CFR 54.9815-2711 and the minimum class size rules. Voluntary products, limited-benefit plans and an ICHRA can supplement, but a limited-benefit plan does not count as minimum essential coverage for the mandate. Check building an employee benefits package that fits your budget and group health insurance for small businesses: how it works and what it costs for the options; your broker or an ERISA attorney can confirm the fit for your hours data.
Checklist for the first month of the year
- Count hours of service for every employee, including variable-hour and seasonal staff, monthly.
- Decide which measurement method you use, and write it down.
- Identify who will cross 30 hours in a measurement period and offer coverage on time.
- Track the 95% offer rate and the affordability safe harbor you use.
- Keep records for the 1094-C and 1095-C filings.
Key takeaways
- Part-time means under 30 hours a week on average for ACA purposes; 130 hours in a month is the monthly equivalent.
- Seasonal and variable-hour staff can be tested with a look-back measurement period of 3 to 12 months plus an administrative period of up to 90 days.
- For 2026 the 4980H(a) amount is $3,340 and the 4980H(b) amount is $5,010, and the affordability threshold is 9.96%.
- State leave laws, retirement-plan rules and workers' comp apply to part-time and seasonal workers even when health eligibility does not.