Summer Interns and the ACA



Are you hiring interns this summer?  If so, you need to understand how the Affordable Care Act (“ACA”) requirement to offer health coverage to full-time employees applies to interns. 


The ACA requires Applicable Large Employers (“ALEs”) who had 50 or more Full-Time Equivalent employees (“FTEEs”) in the prior year to offer affordable, minimum value health coverage to their full-time employees or pay a penalty.  The annual penalty can be up to $2,320 (for 2018) per full-time employee (minus the first 30).  “Full-time employees” are those expected to average at least 30 hours per week.

Employees by Any Other Name

The IRS views interns as regular employees. If full-time interns are paid, they should be offered coverage.   If the intern is not full-time, their hours should be measured, just as the ALE would do for other non-full time employees.  If an intern is determined not to be full-time, then the employer does not have to offer coverage.  

Are Your Interns Seasonal?

There is a very narrow, fact-specific exception for “seasonal employees” (1) whose customary employment is six months or less and (2) where, by nature of the position, their employment begins each year at about the same time, like summer or winter.  Seasonal employees can have their hours measured, like non-full time employees, even if they are full-time.

If your interns do not meet those two criteria, your interns are probably not seasonal. If you need extra help one summer, or a temp to fill in for someone on leave, hires to fill those positions are not seasonal either. This is a very fact-specific inquiry and can vary across your workforce. Be careful! Being wrong can be costly!   

Practical Tips

  • Offer coverage.  To avoid the risk of facing a costly penalty, simply offer health coverage to full-time interns. Most won’t take it anyway.

  • Analyze and document.  If you want to apply the seasonal employee definition, do a careful analysis and document your findings. 

  • Not all internships are created equal.  Even if some of your interns are seasonal, others may not be. 

  • Watch out for “season creep”. If your interns or seasonal employees regularly work more than six months, then they aren’t “seasonal.” 

  • Making interns wait. Some employers who do not have a 90-day waiting period may impose a 90-day waiting period on interns only.  However, take care singling out a particular group as it may raise discrimination and other concerns.



The SHRM Blog does not accept solicitation for guest posts.

Add new comment

Please enter the text you see in the image below: