Rehired employees (sometimes called boomerang employees depending on length of service break) bring their own complications when it comes to ACA compliance and benefit management. It is important to know both the IRS regulations as well as the Greenshades system capabilities so that you are making the best decision for your organization.  

13 Week Rule

If any full time employee should leave an organization or have a break in service –in the Greenshades system, this is determined by a gap between pay statements—then  there is a possibility that when the employee begins working again, they could be deemed a new employee by the system. The Greenshades system natively follows the “13 Week Rule” when determining ACA Measurement period start date. This means that if there is a break of service exceeding 13 weeks, the employer can deem the rehired employee to be a “new employee” and restart their measurement period from the date in which they are rehired.  

Example: Pablo is hired 1/1/2023. He leaves the company 4/1/2023, but is rehired 8/1/2023. Because the time between 4/1 and 8/1 exceeds 13 weeks, his measurement period will restart on 8/1/2023.  

The 13 week rule is natively supported by the Greenshades system. Once configuration of measurement groups and measurement periods is set up, the 13 week rule will be applied to all break in service moving forward. 

Rule of Parity 

However, there is an additional rule that can be configured in the Greenshades system should a client wish to follow it called the Rule of Parity.  This exception to the 13 week rule is completely legal under ACA regulation. It allows employers to treat a rehired employee as a new employee if their break in service was less than 13 weeks but at least 4 weeks AND the break in service was longer than their initial employment.  

Example: Mary is hired on 1/1/2023, she worked the month of January as a seasonal employee and leaves 2/2/2023. She is placed at a new gig through the company on 4/1/2023. Since her break in service was less than 13 weeks, if we followed the 13 week rule, her measurement period start date would be 1/1/2023. BUT we can use the Rule of Parity (since the break in service was < 13 weeks but > 4 weeks and longer than the 4 weeks she worked originally) so her measurement period start date would be 4/1/2023. 

To configure Rule of Parity:

Step 1:  Navigate to the Measurement Group setup page by going to Settings>Benefits, click the Affordable Care Act tab at the top, the click New Measurement Group button.

Step 2:  Setup your measurement group with your most recent lookback period information. check the "Apply Rule of Parity" box for this rule to apply to your employees.