This article summarizes the rules related to changes in employment status when the first position is subject to look-back method under Final Employer Shared Responsibility regulations and proposed rules under IRS Notice 2014-49.

Final Employer Shared Responsibility regulations issued by the Department of the Treasury provide methods to count employee hours of service for purposes of determining who is a “full-time employee” under the Patient Protection and Affordable Care Act (“PPACA”). Under these rules, employers may use either the look-back method or the monthly measurement method to determine who is a full-time employee for purposes of the Employer Shared Responsibility mandate and IRS reporting requirements.

In Notice 2014-49, the IRS issues proposed guidance addressing the application of the look-back method in certain situations. Although proposed, the IRS has indicated that employers may rely upon the proposed methods outlined in Notice 2014-49 until further guidance is issued.

Updated January 2018.

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