What Is an Eligible Employee?

An eligible employee is any employee of a firm that has met the basic qualifications to receive some sort of benefit. Those benefits may be in the form of the ability to participate in some program operated by the employer, such as a bonus pool or commission structure, or have to do with meeting the criteria set by an insurance provider to participate in a group health or life insurance plan. Eligibility may also have to do with the receipt of other employee benefits, including being fully vested and able to participate in a stock program, or becoming eligible for inclusion in a retirement program.

Typically, an eligible employee is evaluated and determined to be in compliance with any qualifications that may have to do with participation in some program offered by or through the employer. In many cases, there are specific windows of opportunity in which the employee may take certain steps to become eligible and eventually be accepted into the program. For example, a bonus program for hourly employees may require that the eligible employee put in a full work week for each of the four weeks in a 30-day period in order to be eligible for some sort of additional compensation. In like manner, a salesperson may be eligible for a commission only if the accounts he or she currently manages generate a certain amount of revenue for the billing period cited.

The concept of an eligible employee is often associated with the ability to enjoy certain benefits in addition to wages or salary. This can include the ability to participate in a group policy contract provided through the employer, such as a health insurance plan or a life insurance group policy. Many employers will require that the employee work a minimum number of hours per week in order to be eligible for the coverage. In addition, the employee may have to fulfill a waiting period before full coverage is extended. This is particularly true with new employees who may be required to successfully complete a 90-day probation period before being eligible for enrollment in the health and life insurance programs.

In just about any situation, an eligible employee will go through a period of complying with basic terms and conditions before gaining access to the additional benefits. Employers normally provide full disclosure to employees on how to become eligible for participation in all the benefit programs offered, and may even provide some assistance in monitoring the progress toward fulfilling those requirements. Depending on the type of benefit involved, the eligibility may be re-evaluated from time to time, ensuring that the employee is still in compliance and is eligible to continue receiving the benefits.