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Do I Have to Provide Health Insurance to My Summer Interns?

By June 2, 2014 February 19th, 2015 No Comments

That’s a legitimate question in light of the Affordable Care Act (ACA). Recent guidance associated with the ACA included clarification surrounding the requirement to provide health coverage to full-time interns.

The ACA applies to companies with 50 employees – and if and when the ACA goes into effect in 2015, this will include part-timeSun workers, seasonal employees, and interns. It is worth noting that companies nearing the 50-employee benchmark should be aware that by hiring interns, they could cross the threshold, making them subject to ACA compliance under Employer Shared Responsibility Payment . This single factor may change the cost-benefit analysis of hiring interns or force companies to choose between hiring interns or hiring seasonal employees. The latter are exempt from receiving health care coverage, but paid interns are not included nor defined in the exception.

Because internships are typically short stints of 3 – 4 months,  interns would only receive short-term health coverage, which it is not an ideal source of health care insurance. The good news is that most students up to the age of 26 are required to have their health insurance covered by their university, their parents’ or guardian’s plan, so many interns may not even need health insurance from their employer.

Will interns present a penalty risk for your organization in 2015?

What Employers Should Know about Interns and the ACA:

  • When a paid intern is full-time or works 30 hours or more, he/she must be offered health coverage to avoid a penalty.
  • Full-time paid interns at government entities are excluded
  • Full-time unpaid interns are also excluded
  • If your full-time paid interns can be classified as seasonal workers, then you can exclude them. Seasonal is defined as working 6 months or less at approximately the same time each year.
  • If you keep interns on board for more than six months, you should consider providing health care coverage.
  • Employer Shared Responsibility Payment is effective 1/1/15 for all employers regardless of their plan year.  Any interns meeting the ACA definition of full-time who are not offered coverage will not pose an ACA Shared Responsibility penalty risk until 1/1/15.

More information is available on the Department Of Labor’s website..