Hiring interns can reap many benefits for your business - no hiring commitment, evaluate new talent, expose young professionals to a professional work environment, and learn from students' fresh perspectives. According to the ACA, you may need to extend benefits to your interns.
The Affordable Care Act (ACA) mandates that organizations with 50 or more employees provide health benefits to all employees who work at least 30 hours a week. While the ACA does not specifically reference interns, the IRS views interns as regular employees. If interns are full-time and being paid, the employer should offer coverage.
Are Your Interns Seasonal?
There are some exceptions for "seasonal employees" if the interns customary employment is 6 months or less, and where, by nature of the job their employment begins at about the same time each year. If your interns do not meet those two criteria, your interns are probably not seasonal and you may need to provide health benefits.
What About Unpaid Interns?
Organizations aren’t required to provide employee benefits to unpaid interns. However, it is vital for organizations who take this route to understand that unpaid interns are categorically different than paid interns. Specifically, unpaid interns:
- Must have their internship structured as training, similar as to what they would experience in an academic or educational environment.
- Must not make a contribution that directly or immediately helps the organization. The primary benefit must accrue to the intern.
- Must not displace an existing employee or prevent an organization from completing a hiring process.
- Must not be guaranteed a job on completion of the internship.
- Must agree not to be paid throughout the internship.
The Department of Labor levies significant fines on organizations that run afoul of any (not necessarily all) of the above, plus organizations can suffer serious damage to their reputation.
- Build an internship program that benefits your business, team and the intern – making the intern feel valued could repay you with a full-time employee in the future
- Always document and track hours worked for both paid and unpaid interns.
To learn more about adding interns to your group benefits plan, please contact Connected Benefits today. Your consultation with us is free!