How do I determine my Applicable Large Employer status?
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Last modified 1/28/2021 7:23:47 AM EST |
Added by ACAwise Team
There are two ACA provisions that apply only to Applicable Large Employers (an employer with 50 or more full-time equivalent employees during the past year).
- Employer Shared Responsibility Provision
Under the ACA employer shared responsibility provision, ALEs are required to provide MEC that is affordable and provides minimum value to all full-time equivalent employees.
- Employer Information Reporting Provision
Under the ACA information reporting requirements, the ALEs who offer MEC to their full-time employees must submit the health coverage information to the IRS and furnish copies to their enrolled full-time employees.
When the ALE fails to comply with the above two provisions of the ACA, they will be subject to huge penalties under section 4980H and 6056 from the IRS.
This is why it is very important for employers to determine their Applicable Large Employer status.
ALE status Calculator
If you need to determine your Applicable Large Employer status, get in touch with ACAwise, we built an automated ALE status calculator to help employers.
Using this tool, you can determine your ALE status in minutes.
- Enter the number of full-time employees at the end of each applicable month in the ‘Number of Full Time Employees’ column.
- Then, enter the total number of hours worked by all your part-time employees. for each applicable month in the ‘Part-Time Employees Hours’ column.
- Finally, click Calculate.
Fewer than 50- You are NOT an ALE for the current calendar year. You are not subject to the employer shared responsibility provisions or the employer information reporting requirements for the current year.
Please Note: If you have less than 50 employees, but are a self-insured company, you are still required to file ACA returns for all the covered individuals regardless of the employee count to avoid penalties from the IRS.
- 50 or more than 50- You are an ALE for the current calendar year. Therefore, you are required to meet the employer shared responsibility provisions and the employer information reporting requirements to avoid potential penalties from the IRS.