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 Ramifications of the Affordable Care Act for Community Colleges as Employers 

12/13/2012

Dear Colleague:

As you are aware, the Patient Protection and Affordable Care Act (PPACA) creates significant new responsibilities for community colleges as employers. This communication is designed to give AACC members some context on the PPACA’s provisions relating to adjunct faculty and to outline AACC’s work on that issue. It is not intended to provide definitive legal or regulatory advice.

Under the PPACA, full-time employees at community colleges are entitled to a prescribed set of insurance benefits for a limited cost (no greater than 9.5% of their monthly earnings). Full-time employees (FTE) are defined as those who work 30 or more hours per week in a given month. Most full-time, full-year faculty will be treated as FTEs.

Whether adjunct faculty will be treated as FTEs depends on their particular circumstances. In some cases, colleges choose to cap the amount of courses an adjunct may teach in a given year, thus creating a clear line between full-time faculty, who are FTEs, and part-time adjunct faculty who work less than 30 hours per week on average and are clearly not FTEs.

However, many colleges do not cap the number of courses taught by adjuncts. In these circumstances, it may be much harder for colleges to determine in advance whether an adjunct meets the PPACA’s definition of FTE, since colleges are not certain at the beginning of the academic year how many courses a given adjunct will work. Technically speaking, “variable-hour” employees are those for whom the employer cannot determine, upon hiring, whether they will meet the 30-hour weekly average that would make them eligible for benefits as an FTE.

The IRS has created an alternative method for determining whether variable-hour employees should be considered FTE. In these cases, the employer must use a measurement period to determine whether the variable-hour employee qualifies for PPACA health insurance benefits as an FTE (benefits would then be provided prospectively). The measurement period can vary between 3 and 12 months, at the employer’s discretion.

It is simply not viable to count, and document, the hours that adjunct faculty members work during the measurement period. AACC has been in contact with IRS officials, who seem to recognize this reality. Therefore, the agency is actively considering other approaches to fairly assess when an adjunct faculty member should be considered a full-time employee under the PPACA.

In its ongoing discussions with the IRS, AACC is suggesting that adjunct faculty be treated as FTEs if their course load during the required measurement period is equal to or greater than three quarters of a full course load for a full-time instructor in their department. Institutions would determine what constitutes a full-time course load for each department. The definition of full-time course load could also be set at the campus level.

AACC believes that the three-quarters standard for adjunct faculty strikes a fair balance between the intent of the PPACA to provide health insurance coverage to people who are legitimately full-time with the financial realities facing member colleges. Nothing in the PPACA or AACC’s approach would prevent any institution from providing health insurance benefits to any faculty members.

The IRS is expected to issue guidance on the PPACA’s treatment of adjunct faculty members in the coming weeks, possibly before year’s end. Given this, you may wish to wait until that guidance is issued before potentially making changes to your institution’s policies in this area. The IRS guidance will take effect when it is public, but it also may be altered after subsequent public comment.

AACC will notify member colleges as soon as this guidance becomes available and likely ask them to submit comments on the guidelines.

We hope that you find this brief summary of this complex situation helpful. If you have any questions, please contact David Baime, Senior Vice President for Government Relations and Policy Analysis.

The AACC Government Relations and Policy Analysis Team:

  • Senior Vice President: David Baime, ext. 224
  • Associate Vice President: Jim Hermes, ext. 216
  • Legislative Associate: Laurie Quarles, ext. 249
  • Program Director, Policy Analysis: Christopher M. Mullin, ext. 258
  • Director, Health Professions Policy: Roxanne Fulcher, ext. 274
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