Applicable Large Employers – Simplify compliance with ACA Software
This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. We hope you find it helpful.
Although the ACA Individual Mandate repeal takes effect in 2019, the Employer Mandate is still being enforced. ALEs must continue to offer qualifying coverage to full-time employees, and reporting is mandatory for the 2017 tax year.
From the ACA Times, “Here are three terms important in determining whether an organization is an ALE:
A full-time employee in general is an employee who, on average, works at least 30 hours per week, or at least 130 hours in a 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. For example, two employees who each work an average of 15 hours per week are equivalent to one full-time employee.
To determine if an organization is an applicable large employer for a year, in general, the organization counts its full-time employees and full-time equivalent employees for each month of the prior year, and calculates the average number of FT and FTE employees during the year.
In making the ALE calculation, companies must determine if they are a member of an aggregated group of two or more commonly owned, related or affiliated employers.
Members of an aggregated group must combine their employees to determine their workforce size. The members of the group must count the full-time and full-time equivalent employees of all members of the group for each month of the prior year, and calculate the average number of FT and FTE employers for the year.
For example, if three firms are jointly owned, with one on average having 20 full-time employees during the year, another having 25 and the third with 12, the three firms together are an ALE.
There are additional rules for determining who is a full-time employee, including what counts as hours of service. For more information on these rules, see the employer shared responsibility final regulations and related questions and answers on IRS.gov.”