ACA Frequently Asked Questions

ACA Frequently Asked Questions

4. What is an Applicable Large Employer?

If an employer has at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is an Applicable Large Employer (ALE) for the current calendar year, and is therefore subject to the Employer Shared Responsibility Provisions (also referred to as the ACA Employer Mandate) and the Employer Information Reporting Provisions, which requires ALEs to report annually to the IRS information about the health care coverage, if any, they offered to full-time employees. The IRS will use this information to administer ACA penalties for non-compliance.


full-time employee for any calendar month is an employee who has on average at least 30 hours of service per week during the calendar month, or at least 130 hours of service during the calendar month.


A full-time equivalent employee is a combination of employees, each of whom individually is not a full-time employee, but who, in combination, are equivalent to a full-time employee. An employer determines its number of full-time-equivalent employees for a month by combining number of hours of service of all non-full-time employees for the month, but do not include more than 120 hours of service per employee, and divide the total by 120.


To determine its workforce size for a year, an employer adds its total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year and divides that total number by 12.

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