Part-time workers play a crucial role in today’s workforce, but their eligibility for benefits can be confusing — especially when factoring in Affordable Care Act (ACA) requirements. Whether you’re an employer wondering how ACA rules apply to part-time employees or an HR professional trying to stay compliant, it’s important to understand where legal obligations end and where strategic offerings can begin.
What is a part-time employee?
Part-time employees are generally those who work fewer hours per week than their full-time counterparts, based on the scheduling standards set by their employer. However, there’s no universal definition — what qualifies as part-time can vary by employer and industry.
How the ACA defines “part-time”
Under the ACA, a part-time employee is defined as someone who averages fewer than 30 hours of service per week or 120 hours per month. This definition matters when determining which employees must be offered health coverage under the Employer Shared Responsibility Provisions (ESRP), also known as the employer mandate.
Are there minimum or maximum hours?
While the ACA sets the 30-hour threshold for benefits eligibility under the employer mandate, it doesn’t establish a federal minimum or maximum number of hours someone must work to be considered part-time. Employers can define part-time status internally, provided it aligns with applicable labor laws and ACA guidelines.
Does the ACA apply to your business?
Not all employers are subject to ACA rules regarding employee health insurance. Whether your business is required to comply depends on your size.
Applicable large employer (ALE) thresholds
The ACA’s employer mandate applies to Applicable Large Employers (ALEs)—businesses with 50 or more full-time or full-time equivalent (FTE) employees. ALEs must offer affordable health insurance that provides a minimum value to full-time employees and their dependents or face potential penalties.
How to determine your workforce size
To calculate if you’re an ALE:
- Add all full-time employees (those averaging 30+ hours per week)
- Convert part-time hours into FTEs by totaling all part-time hours for the month and dividing by 120
- Combine full-time and FTE counts
If the total averages 50 or more employees per month over the previous calendar year, your business is an ALE.
Do health insurance requirements apply to part-time employees?
Employer mandate under the ACA
The ACA does not require employers to offer health insurance to part-time employees. The mandate only applies to full-time employees under the 30-hour definition.
Which employees must be offered coverage?
ALEs must offer coverage to:
- All employees averaging 30 or more hours per week
- Their dependents up to age 26
Part-time workers do not fall under this obligation, but employers may choose to extend coverage voluntarily.
Is your health coverage considered affordable?
To avoid penalties, ALEs must offer health coverage that is considered “affordable.” For 2025, affordability is defined as employee contributions not exceeding 8.39% of the employee’s household income (subject to annual adjustments).
Required benefits for part-time employees
Even if health insurance isn’t required, employers may still be obligated to provide other benefits.
Health insurance
Not required under ACA for part-time employees, unless voluntarily offered.
Workers’ compensation
Generally required for all employees, regardless of full- or part-time status, based on state laws.
Unemployment insurance
Employers must pay into federal and state unemployment insurance programs for eligible employees, including part-time workers.
Family and Medical Leave (FMLA)
Employees are only eligible for FMLA if they:
- Work at a company with 50+ employees
- Have been employed for at least 12 months
- Have worked at least 1,250 hours in the past year
Many part-time workers will not meet this threshold, but it depends on work patterns.
Overtime pay (where applicable)
Under the Fair Labor Standards Act (FLSA), non-exempt part-time employees must be paid overtime (1.5x regular pay) for hours worked beyond 40 in a workweek.
Voluntary benefits employers may offer
Many employers offer part-time benefits to stay competitive — even when not required to do so.
Retirement plans
Some employers allow part-time workers to participate in 401(k) or similar plans, and new rules under SECURE Act 2.0 expand eligibility for long-term part-time employees.
Fringe benefits
Discounts, commuter benefits, wellness programs, or tuition assistance can improve job satisfaction and loyalty.
Paid vacation or holiday pay
Not required by federal law, but some employers choose to offer PTO or holiday pay as a recruitment and retention tool.
Why offer benefits to part-time employees?
While it’s not required to offer many benefits to part-time staff, there are compelling reasons to do so.
Talent attraction and retention
A strong part-time benefits package can reduce turnover and attract more qualified candidates.
Engagement and morale
Benefits make part-time employees feel valued, which boosts engagement and productivity.
Staying competitive
Companies offering robust benefits to all workers — regardless of hours worked — often stand out in a competitive labor market.
Health insurance options for part-time employees
Even if employer-sponsored coverage isn’t available, part-time workers may still find affordable options.
Employer-sponsored plans
Some employers extend health plans to part-time employees, though eligibility rules and contribution structures may differ.
Individual marketplace plans
Part-time employees can shop for coverage through the Health Insurance Marketplace and may qualify for premium tax credits based on income.
State or federal assistance programs
Depending on income level and state guidelines, part-time workers may qualify for Medicaid or other public health programs.
Frequently asked questions
How many hours do you need to work to qualify for benefits?
Under the ACA, employees must work 30 or more hours per week to be eligible for mandatory health insurance coverage from ALEs. Other benefits may have different hour thresholds based on employer policy or state laws.
Do part-time workers get paid vacation?
Not federally required, but some employers voluntarily offer PTO to part-time employees.
Are part-time employees entitled to holiday pay?
Holiday pay is not required for any employees — full-time or part-time. It’s typically offered as a discretionary benefit.
Stay compliant with ACA requirements
Keeping up with ACA regulations is key to avoiding penalties and maintaining a positive employer reputation.
Tips for compliance
- Track employee hours closely, especially for those near the 30-hour threshold
- Classify employees consistently and document eligibility
- Reassess workforce size annually to determine ALE status
Using ACA reporting services and tools
Consider using ACA compliance tools or third-party services to manage reporting, track full-time equivalents, and ensure your health plans meet federal requirements. These tools can help streamline the process and reduce the risk of compliance errors.
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter. The reader should not act or refrain from acting on the basis of any content included in this article without seeking tax, legal, or other professional advice. The contents of this article contain general information and may not reflect current legal developments or address the reader’s situation. ebm disclaims all liability for actions the reader takes or fails to take based on any content within this article.
