Colleges and Universities Receive Some Relief

Higher Education|Not-for-Profit

By Doug Morally

Since the passage of the Affordable Care Act, colleges and universities have been assessing the impact to institutions’ health care costs, particularly related to adjunct faculty members.  On February 24, 2014, the Internal Revenue Service (IRS) released guidance specifically related to adjunct faculty members under the shared responsibility for employers regarding health care coverage. 

The rules released by the IRS require employers of adjunct faculty to use a reasonable method for crediting hours of service.  This guidance recognizes that adjunct faculty members are compensated based on the number of courses or credit hours assigned, while acknowledging that adjunct faculty are subject to variation in work patterns and duties, including course prep and grading papers.

Until further guidance is issued, the Treasury Department and the IRS have determined that one reasonable method is to credit an additional 1 hour and 15 minutes for every hour teaching in the classroom.  Separately, one additional hour per week should be credited to each adjunct faculty member for each hour spent outside the classroom performing duties such as required office hours or required attendance at faculty meetings.

Although further guidance may be issued, the method described above may be relied upon at least through the end of 2015.  If you have questions about the IRS’ guidance, please contact one of our professionals.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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