Managing Affordable Care Act compliance can become more complicated when a business operates under multiple Employer Identification Numbers (EINs).

Even when businesses operate independently, common ownership may affect how they are classified under IRS rules.

For business owners, HR professionals, and administrators responsible for managing ACA across several companies, determining Applicable Large Employer status is crucial.

Affordable Care Act reporting for multiple EINs involves determining whether the companies qualify as an Aggregated Applicable Large Employer Group, tracking workforce data, and meeting individual filing responsibilities.

Comprehensive ACA software can help simplify this process and reduce the administrative workload.

Common Ownership

Under the Affordable Care Act, an ALE generally has an average of at least 50 full-time employees, including full-time equivalent employees, on business days during the previous calendar year.

A new employer that was not in existence on any business day during the previous calendar year is an Applicable Large Employer for the current year if it reasonably expects to employ, and actually employs, an average of at least 50 full-time employees, including full-time equivalent employees, on business days during the current year.

Businesses that meet the IRS’s common-ownership and control rules may need to combine their employee counts when determining Applicable Large Employer status.

The IRS refers to these related entities as an Aggregated ALE Group. For example, an owner operating three separate businesses with average counts of 25, 20, and 15 full-time employees, respectively, would have a combined total of 60 full-time employees across the three companies.

Individually, none of these companies has 50 full-time employees. However, if they qualify as an Aggregated ALE Group, their combined employee count would meet the numerical threshold for Applicable Large Employer status.

Separate EINs do not necessarily mean separate treatment under Affordable Care Act rules.

Reporting Responsibilities

While employee counts are combined to determine Applicable Large Employer status, each ALE Member has its own filing obligations.

Each member of an Aggregated ALE Group must file under its individual EIN. This includes:

• Filing Form 1094-C, including one Authoritative Transmittal for that Applicable Large Employer Member.
• Filing Forms 1095-C for its full-time employees and, when applicable, reporting individuals enrolled in its self-insured health plan.
• Reporting offers of health coverage and, when applicable, enrollment information.
• Identifying other Aggregated ALE Group members on Form 1094-C, as required.

The IRS does not accept one combined Authoritative Transmittal for the entire group. A company with fewer than 50 employees may still have reporting responsibilities if it is a member of a qualifying Aggregated ALE Group.

Managing Workforce Data

Another challenge arises when staff members work for more than one company within the same ownership group.

For example, a worker may divide their time between two related entities. Tracking hours separately without considering the employee’s combined work history could lead to an inaccurate assessment of full-time status.

Under IRS rules, hours of service for companies in the same Aggregated ALE Group generally are combined when determining whether an employee is full-time. However, for ACA reporting purposes, when a staff member works for more than one ALE Member during the same month, generally the member for whom the employee worked the greatest number of hours of service is treated as the employer for that month.

Managing this information manually can become time-consuming, particularly when businesses have different payroll systems, variable-hour workers, or frequent staffing changes.

Accurate Affordable Care Act filing requires access to reliable information throughout the year, not just when annual forms are due.

Consolidated Data Management

Although each Applicable Large Employer Member must meet its individual filing requirements, managing workforce data through a consolidated system can make the overall process more efficient.

Rather than relying on separate spreadsheets for every business, comprehensive ACA software can help administrators track workforce data across multiple entities while maintaining the data needed for each ALE Member’s individual reporting.

This can provide several important benefits:

• Consolidate hours of service across related companies in the same Aggregated ALE Group to help determine full-time status.
• Maintain coverage information for multiple EINs.
• Monitor staff eligibility and changes throughout the year.
• Reduce duplicate data entry and the potential for filing errors.
• Streamline preparation of Forms 1094-C and 1095-C for each Applicable Large Employer Member.

Having accurate, accessible information is particularly valuable when staff members move between related companies or work at several locations.

Centralized data management can also help ensure that relevant information is available when preparing annual filings or responding to an IRS inquiry.

ACA Software and Services

Passport Software provides IRS-certified ACA software designed to simplify compliance and year-round workforce data management.

Our multi-entity Affordable Care Act software supports businesses with multiple EINs under common ownership, consolidating workforce data while managing the reporting requirements for each separate company.

Passport’s ACA software and services include eligibility tracking, automated 1094-C and 1095-C filing preparation, and optional IRS-approved proxy submission.

If you prefer to outsource the process, our Full Service option is the easiest. Provide a simple spreadsheet of employee data, and we handle the entire Affordable Care Act management and reporting process, including filing.

Whether you operate under one EIN or manage several related companies, having the right tools and knowledgeable support can save administrative time, improve reporting accuracy, and help reduce the risk of costly penalties.

To learn more about how our ACA software and services can ease the burden of compliance, call 800-969-7900. Or, contact us – we are here to help.