How to use the ALE status calculator in ACAwise?
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Last modified 1/28/2021 7:18:42 AM EST |
Added by ACAwise Team
The Affordable Care Act (ACA) employer mandate requires employers with 50 or more full-time equivalent employees (ALE) during the previous year to offer health insurance coverage that is affordable and provides minimum value to at least 95% of their full-time employees and their dependents. If an ALE fails to comply with this will be subject to a potential penalty from the IRS.
To determine whether you are an ALE who must comply with the ACA employer mandate, use the ALE status calculator from ACAwise.
Follow these steps to use the ALE status calculator in ACAwise
- Enter the number of Full-Time employees at the end of each applicable month in the ‘Number of Full Time Employees’ column.
Please note: A full-time employee works an average of 30 hours per week or 130 hours in a calendar month
- Enter the total number of hours worked by all Part-Time employees for each applicable month in the ‘Part-Time Employees Hours’ column.
Note: Employers cannot neglect part-time employees when determining their ALE status. You may have several part-time workers, such as seasonal employees, contract employees, and temporary workers. The hours that those employees work may add up to full-time equivalent employee hours.
That’s all you need to do!
- After entering the required fields, click on the Calculate button to get your ALE status.
- If the result is 50 or more monthly full-time employees on average, then you are ALE.
This confirms that you must comply with the ACA employer mandate to avoid steep penalties from the IRS.
- If the result is less than 50 monthly full-time employees on average, then you are NOT an ALE. You are not required to comply with the ACA employer mandate.
However, if you are a self-insured employer, you must still file ACA returns for all covered individuals regardless of the employee count.
If you are ALE, seeking a solution to meet your 2020 tax year ACA reporting requirements, reach out to ACAwise. We handle ACA reporting for various businesses and help them stay ACA compliant. We can also help your business stay compliant and avoid unwanted penalties from the IRS with ACAwise.