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 IRS Releases Final Regulations on Adjunct Faculty 


Last week, the U.S. Department of Treasury released final regulations relating to the measurement of the work effort of adjunct faculty under the Affordable Care Act (ACA). Under the ACA, individuals who work 30 or more hours per week, on average, are entitled to a minimum level of coverage, at a minimum cost; if they do not receive this coverage, and are found to merit a subsidy to pay for their insurance, the employer is subject to a $3,000 penalty.

The IRS regulations directly address the complex and contentious issue of how to measure adjunct faculty effort. The IRS decision largely reflects positions taken by AACC in its formal comments to the IRS, informal conversations with Treasury officials, and related advocacy. It is our belief that this regulation is constructed such that in the clear majority of circumstances, colleges will not have to limit the hours of adjuncts to avoid having to assume the financial obligation of providing health care insurance.

The final regulation gives institutions two routes to measuring adjunct effort. The first one stipulates that colleges must use a “reasonable” method of determining whether an adjunct is an FTE.The regulation notes that it is not reasonable for the employer to classify an employee who is generally considered full-time as part-time. But the approach appears to provide colleges a good deal of latitude. This same language was included in the proposed rule that was issued January 2, 2013.

The regulation also prescribes a “safe harbor” that colleges can use to measure adjunct faculty effort. This approach has the benefit of providing institutions an unambiguous way of ensuring that they are in compliance. This approach stipulates that, for each hour or credit that an adjunct teaches, they must be credited with an additional 1.25 hours of outside work. In addition, any required out-of-classroom hours must also be included. For example, if an adjunct teaches 12 semester credit hours without additional out of classroom responsibilities, they would be assumed to work 27 hours, and would not be entitled to benefits.

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