United States 

 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number: 14-207 Date: October 3, 2014

Subject: Employer Shared Responsibilities under Internal Revenue Code Section 6056

Background 

As specified in P.L. 111-148, applicable large employers need to report information on their 

employees’ access to health coverage to the Internal Revenue Service (IRS) annually. 

Applicable large employers are also required to furnish this information to each full-time 

employee. These reporting requirements, under Internal Revenue Code (IRC) section 6056, go

into effect for plan year 2015, with information due to the IRS and provided to full-time 

employees in early 2016. As part of OPM’s role as administrator of the Federal Employees 

Health Benefits (FEHB) Program, OPM is providing guidance to facilitate compliance with IRC 

section 6056. 

Purpose 

This Benefits Administration Letter (BAL) provides a framework for reporting and additional 

information to assist you in complying with IRC section 6056 for purposes of the FEHB 

Program. 

Applicable Large Employer and Applicable Large Employer Member 

Under IRC sections 6056 and 4980H, an employer with 50 or more full-time employees is 

considered an Applicable Large Employer (ALE) and is subject to these provisions. Full-time 

employees are defined here as those with at least 30 hours of service per week or 130 hours of 

service per month. An ALE can be made up of related entities, called ALE members. ALE 

members are the entities responsible for reporting under IRC section 6056 and responsible for 

any employer shared responsibility payments owed. Any shared responsibility payment is made 

by the ALE member to the Federal Treasury. 

To ease compliance with IRC section 6056, OPM is providing a definition of the ALE and ALE 

member within the scope of its role as administrator of the FEHB Program. 
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ALE: The ALE is the group of civilian, non-Postal, executive agencies that are permitted 

by statute to participate in the FEHB Program. 

ALE Member: ALE members are Cabinet level Departments, independent agencies, 

boards and commissions that make up the ALE. 

Following these definitions, each Cabinet level Department, independent agency, board and 

commission is responsible for reporting the required information on its full-time employees to 

the IRS and reporting necessary information to full-time employees. OPM has been meeting 

with shared service centers and payroll providers on the elements needed to collect and report on 

these requirements for the FEHB Program. 

Note: All employers with at least 50 full-time employees must provide these reports, so agencies 

that are not listed in the definition of ALE above but meet the large employer definition (i.e., 50 

or more full-time employees) should also prepare to implement reporting operations. These 

include, but are not limited to, the Legislative Branch and the Judicial Branch.

Required Deadlines and Voluntary Reporting 

ALE members are required to report information from plan year 2015 to the IRS by no later than 

February 29, 2016 or March 31, 2016 if filed electronically. ALE members are required to 

furnish employee statements by February 1, 2016. Voluntary reporting is also available for plan 

year 2014. 

At the bottom of this BAL, we have included links to applicable IRS guidance, as well as a link 

to the Government Manual, that details which entities comprise the Executive Branch as a 

reference if required. 

Method for Determining Full-Time Employees 

To comply with IRC section 6056, the ALE member must report information on all full-time 

employees to the IRS annually. For purposes of IRC section 6056, all employees with 30 or 

more hours of service per week or 130 hours of service per month, are considered full-time 

employees. The IRS guidance provides two methods for determining full-time employee status, 

the Monthly Measurement Method and the Look-back Measurement Method. The IRS requires 

the ALE member use a consistent of method for each category of employee. 

OPM is strongly recommending that ALE members utilize the monthly measurement method to 

determine full-time employees for all categories of employees. We request that you work with 

your shared service centers and payroll providers to fulfill the reporting requirements using the 

monthly measurement method. 

Please see the attached guidance on the monthly measurement method. 

IRS Guidance 

We also encourage you to review the IRS guidance on this issue. 
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Questions and answers: http://www.irs.gov/uac/Questions-and-Answers-on-Reporting-of-Offersof-Health-Insurance-Coverage-by-Employers-Section-6056

Final regulation: https://www.federalregister.gov/articles/2014/03/10/2014-05050/informationreporting-by-applicable-large-employers-on-health-insurance-coverage-offered-under

Draft instructions: http://www.irs.gov/pub/irs-dft/i109495c--dft.pdf

Draft forms: 

Form 1094-C used to report to the IRS summary information for each employer and to transmit 

Forms 1095-C to the IRS. 

http://www.irs.gov/pub/irs-dft/f1094c--dft.pdf

Form 1095-C used to report information about each employee. 

http://www.irs.gov/pub/irs-dft/f1095c--dft.pdf

Government Manual: http://www.usgovernmentmanual.gov

OPM will provide additional information and guidance on employer shared responsibility 

reporting as we work to assist agencies and their shared service providers to provide the required 

IRS reporting. 

If you have any questions regarding this Benefits Administration Letter please contact Rachel 

Royster at 202.606.4181 or Rachel.Royster@opm.gov. 

 Sincerely, 

 

John O’Brien

Director 

Attachment 
4

Attachment 

Monthly Measurement Method 

OPM has been working with OMB, Treasury and IRS to provide guidance to agencies on the 

reporting requirements of Section 60561

of the Internal Revenue Code. OPM has also been 

working with shared service centers and payroll providers on the elements needed to collect and 

report on these requirements for the FEHB Program. 

Draft Forms 1094-C and 1095-C have been recently released by the IRS to identify the data 

elements that will be required for reporting purposes. At the heart of these required data elements 

are the employee’s full-time status and the methodologies available to Applicable Large 

Employers (ALE)2

to determine their employees’ status. For purposes of reporting on FEHB 

eligibility, the ALE is defined as the civilian, non-Postal, executive agencies that are permitted 

by statute to participate in the FEHB Program. The IRS regulations include aggregation rules 

allowing an ALE to be made up of related entities, called ALE members. OPM has defined 

ALE members as Cabinet level Departments, independent agencies, boards and commissions. 

The IRS has designated two methods: the Monthly Measurement Method and the Look-back 

Measurement Method to determine employees’ full-time status. OPM strongly recommends that 

ALE members utilize the Monthly Measurement Method to determine their employees’ full-time 

status. This document is intended to provide ALE members with information on the Monthly 

Measurement Method. It does not prescribe to explain the intricacies and impacts to any 

assessable payment penalties under Section 4980H(a) and 4980H(b) that may result from 6056 

reporting. It is the responsibility of ALE members to understand and comply with 

The Affordable Care Act. 

Monthly Calculation Option 

The monthly measurement method is a straight forward calculation where the employee’s fulltime status is determined by the number of hours of service3

during a calendar month. If an 

employee has 130 or more hours of service during a calendar month, they are considered a fulltime employee for that calendar month. 

Example 1: Employee A works 130 hours or more in January 2015, Employee A is designated and 

reported as full-time for January 2015. 

 

 Weekly Calculation Option 

The monthly measurement method also allows employers to determine an employee’s full-time 

status based on the hours of service over successive weeks. Known as the weekly rule, it was 

designed to provide additional flexibility and reduce administrative burden for employers. 

Under the weekly rule, an employee’s status is based on the number of service hours over a four 

(4) or five (5) week4

period, depending on the month. For each calendar month, at the 

employer’s discretion, the measurement of hours will include either the week containing the first 

 

1 http://www.irs.gov/irb/2014-13_IRB/ar09.html 

2 http://www.gpo.gov/fdsys/pkg/FR-2014-02-12/pdf/2014-03082.pdf - § 54.4980H–1 Definitions (a)(4) 

3 http://www.gpo.gov/fdsys/pkg/FR-2014-02-12/pdf/2014-03082.pdf § 54.4980H–1 Definitions (a)(24) 

4 http://www.gpo.gov/fdsys/pkg/FR-2014-02-12/pdf/2014-03082.pdf - § 54.4980H–1 Definitions (a)(50) 
5

day of the month or the week containing the last day of the month, but not both5. For months, 

that contain four (4) successive weeks, an employee is considered full-time if they have 120 or 

more hours of service. For months containing five (5) successive weeks, an employee is 

considered full-time if they have 150 or more hours of service. 

Example 2: To determine the full-time status of Employee B for the month of July 2015, an employer 

would count the hours worked based on the options shown in Table 1 below. Because there are only four 

(4) weeks in July 2015, an employee is considered full-time only if they have 120 or more service hours. 

Table 1: Monthly Measurement Method – Weekly Rule – 4 Successive Weeks 

Option 1: First-day of the Month Option 2: Last-day of the Month

Week Hours Week Hours

Week 1: 06/28/15 to 07/04/15 30 Week 1: 07/05/15 to 07/11/15 30

Week 2: 07/05/15 to 07/11/15 30 Week 2: 07/12/15 to 07/18/15 30

Week 3: 07/12/15 to 07/18/15 30 Week 3: 07/19/15 to 07/25/15 30

Week 4: 07/19/15 to 07/25/15 30 Week 4: 07/26/15 to 08/01/15 30

Total 120 Total 120

 

Example 3: To determine the full-time status of Employee C for the month of August 2015, an employer 

would count the hours work based on the options shown in Table 2 below. Because there are five (5) 

weeks in August 2015, an employee is considered full-time only if they have 150 or more service hours. 

Table 2: Monthly Measurement Method – Weekly Rule – 5 Successive Weeks 

Option 1: First-day of the Month Option 2: Last-day of the Month

Week Hours Week Hours

Week 1: 07/26/15 to 08/01/15 30 Week 1: 08/02/15 to 08/08/15 30

Week 2: 08/02/15 to 08/08/15 30 Week 2: 08/09/15 to 08/15/15 30

Week 3: 08/09/15 to 08/15/15 30 Week 3: 08/16/15 to 08/22/15 30

Week 4: 08/16/15 to 08/22/15 30 Week 4: 08/23/15 to 08/29/15 30

Week 5: 08/23/15 to 08/29/15 30 Week 5: 08/30/15 to 09/05/15 30

Total 150 Total 150

 

5 http://www.gpo.gov/fdsys/pkg/FR-2014-02-12/pdf/2014-03082.pdf - § 54.4980H–3 Determining full-time employees (c)(3)