The Affordable Care Act uses two terms that look interchangeable and are not. Whether your business owes anyone coverage at all is a headcount question governed by the term seasonal worker. Whether a particular lift op or river guide has to be offered coverage is a separate question governed by the term seasonal employee. Operators who read one rule and assume it answers the other end up either offering coverage they didn't owe or missing an offer they did.
Here is how the IRS actually draws the line, and where the seasonal calendar in a ski or park-gateway town tends to break the assumptions.
"Seasonal worker" and "seasonal employee" are different tests
The IRS addresses this head-on in Q&A 27 of its employer shared responsibility guidance. A seasonal employee is someone hired into a position for which the customary annual employment is six months or less, beginning at roughly the same time each year. That definition matters only for sorting full-time status under the look-back measurement method.
A seasonal worker is someone performing labor on a seasonal basis, borrowing the Department of Labor's definition at 29 CFR 500.20(s)(1) and adding retail staff hired exclusively for holiday seasons. That definition matters only for deciding whether you are an applicable large employer (ALE) in the first place. The IRS states plainly that the look-back measurement method is not available for the ALE determination.
So a summer raft guide can be a seasonal employee, a seasonal worker, both, or neither, depending on which question you're answering. The IRS permits a reasonable, good-faith interpretation of "seasonal worker," which gives you room to reason. It does not give you room to pick whichever answer is cheaper.
The 120-day exception counts your headcount, not your workers' tenure
This is the most common misread, and payroll-vendor summaries reinforce it by describing a seasonal worker as "someone employed four months or less." That is not what the exception says.
Under 26 CFR 54.4980H-2(b)(2), you are not an ALE if your workforce exceeded 50 full-time employees (including full-time equivalents) for 120 days or fewer during the preceding calendar year, and the employees above 50 during that stretch were seasonal workers. The clock runs on how long your combined headcount sat above the threshold. Individual tenure is not the measure.
Run that against a real operating calendar and the results diverge sharply by season type:
- A single winter season at a Summit County or Teton County resort. Opening in November and running into April puts the over-50 period well past 120 days for most operators with a meaningful year-round base. The exception generally will not apply.
- A June-through-August camp or outfitter. Three months of surge, with a small year-round crew the rest of the year, sits comfortably inside the window.
- A two-season operation on the Tahoe north shore that staffs up for winter and again for summer. The two surges are added together against the same 120-day budget.
Two details are worth knowing before you do the arithmetic. First, the regulation lets you treat four calendar months as the equivalent of 120 days, and the four months do not have to be consecutive. An operator whose over-50 period touches parts of six calendar months but totals fewer than 120 actual days can count days instead of months. Second, full-time equivalents count toward the threshold, so a large part-time roster can push you over even if your full-time roster does not.
One more trap in towns where the same family owns a hotel, two restaurants and a shuttle company: businesses under common or related ownership are generally treated as a single employer under section 414 for the ALE count. Whether specific entities aggregate is fact-dependent and worth running past your tax counsel rather than eyeballing.
If you are an ALE, the look-back method is where seasonal staff get sorted
Once you're an ALE, coverage obligations attach to full-time employees, defined as averaging 30 hours of service per week or 130 hours per month. A seasonal hire working six days a week through the holidays clears that easily on a monthly basis.
The look-back measurement method exists to keep that spike from converting a four-month hire into a year of coverage obligation. The IRS worked the example directly in Notice 2012-58, using a ski instructor hired November 15 for a season running through March 15. The employer determines in good faith that the instructor is a seasonal employee, applies a 12-month initial measurement period beginning at the start date, and the instructor works 60 hours a week during the season but is not reasonably expected to average 30 across the full measurement period.
The mechanics are unforgiving about consistency. You choose measurement, administrative and stability periods within the regulatory limits, you apply them uniformly within each employee category, and you document the reasonable expectation at hire. Whether a specific role qualifies as a seasonal employee turns on the customary annual employment for that position at your operation, which is exactly the kind of question a benefits attorney should see before your first season under the rule.
Returning staff: the 13-week break and the rule of parity
Ski towns run on returners, and the rehire rules decide whether a returning lead is a new employee with a fresh measurement period or a continuing employee whose prior status follows them back.
The general rule under 26 CFR 54.4980H-3(c)(4): an employee who goes at least 13 consecutive weeks without an hour of service may be treated as terminated and rehired, and therefore as a new employee on return. Educational organizations use 26 weeks instead.
A Jackson or Breckenridge shoulder does most of this work on its own. A worker who finishes in mid-April and returns in late November has been gone roughly 30 weeks. A worker who stays on through summer operations never breaks service at all, and comes back into winter as a continuing employee whose measurement history carries forward.
The optional rule of parity covers shorter gaps. It lets you treat someone as a new employee if the gap is at least four consecutive weeks and longer than the period of employment immediately preceding it. In practice it only reaches people who left before completing 13 weeks. A guide who worked five weeks in June, left, and returned in August after a six-week absence can fall under it. A returning department head who worked all winter cannot.
Getting this backward is expensive in a specific way: treating a continuing full-time employee as a new hire delays an offer that was already owed, and the gap shows up on the Form 1095-C.
What getting it wrong costs in 2026
The 2026 figures are meaningfully higher than 2025's. Under Rev. Proc. 2025-26, the section 4980H(a) amount is $3,340 per full-time employee annually (minus the first 30), and the 4980H(b) amount is $5,010 per employee who receives a premium tax credit. Affordability for 2026 sits at 9.96% of household income or a safe-harbor equivalent, per Rev. Proc. 2025-25, up from 9.02% in 2025.
There is no separate penalty in the statute for calling someone seasonal. The exposure works differently, and it compounds. If the facts don't support the seasonal worker exception, you were an ALE for that year all along, which means you owe the shared responsibility payment and you failed to file Forms 1094-C and 1095-C, which carries information-return penalties under sections 6721 and 6722 on top. The good-faith standard is the hinge. An interpretation built from your actual operating calendar is reasonable. A classification chosen because it lands you under 50 is not, and it is the kind of reasoning that reads badly in an examination.
Two recent changes are worth putting in your calendar. The Employer Reporting Improvement Act extended the window to respond to a Letter 226-J from 30 days to 90, and added a six-year statute of limitations on shared responsibility assessments where the IRS previously took the position that none existed. The Paperwork Burden Reduction Act lets you furnish Forms 1095-C on request rather than mailing every one, provided you post a clear and conspicuous notice of availability first. Both took effect in December 2024, and the IRS addressed the furnishing mechanics in Notice 2025-15. If you operate in a state with its own coverage mandate, the furnish-on-request relief does not reach that obligation.
Before your next season
Pull last calendar year's monthly headcount, full-time plus full-time equivalents, and mark every month the combined number cleared 50. That single sheet tells you whether the seasonal worker exception is even in play, and it takes an afternoon. If the answer is close to the line, or if you have entities under common ownership, get it in front of counsel before you build next season's offer strategy around it.
Hiring for a winter or summer season now? You can post open roles on TurnSeasons and browse seasonal listings by town to see what competing operators in your market are advertising, including which ones list housing alongside the job.