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Unlocking the Code: Navigating the Affordable Care Act and Intern Hours

Navigating the intricacies of the Affordable Care Act (ACA) can feel like deciphering a complex code. One significant aspect added under section 4980H of the Internal Revenue Code is the employer shared responsibility provisions. But here's a puzzle within that puzzle: How do you count the hours of your interns—both the paid and the unpaid—to determine if your business falls under these provisions?




Interns: More Than Just Coffee Runners

Interns are an invaluable asset to many businesses, providing fresh perspectives and youthful energy. However, when it comes to ACA compliance, treating interns like all other employees is the key. According to the general rule, an intern who receives no payment from an employer won't contribute any hours of service to the ACA calculation.

But what about the interns who are paid or entitled to payment? Here's where the code gets a bit trickier. Any hour of service performed as a bona fide volunteer (as defined in the regulations) for a government entity or tax-exempt entity won't be included in the count. The same goes for hours served as part of a Federal Work-Study Program or a substantially similar program of a State or political subdivision thereof. Additionally, any compensation for services performed that constitutes income from sources outside the United States is exempt.

Cracking the Hourly Code

So, what does this mean for your business? If you have interns, both paid and unpaid, it's crucial to distinguish between hours that contribute to the ACA calculation and those that fall into the exempt categories. Understanding the rules surrounding interns' hours of service is vital for accurate compliance with the employer shared responsibility provisions.

As you navigate the labyrinth of ACA regulations, remember: interns may be more than just coffee runners, but when it comes to calculating hours, the code has specific exceptions. By decoding these intricacies, you can ensure that your business remains in compliance while fostering a positive and inclusive environment for your interns. It's not just about counting hours; it's about cracking the code to a successful and compliant workplace.

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