Applicable Large Employer Calculator
Are you a large employer that has special reporting requirements? Don’t know? The Applicable Large Employer Calculator will determine it for you and it’s free of charge! The Affordable Care Act (ACA) requires “applicable large employers” (ALEs) to offer health coverage to at least 95% of full-time employees and their children (as defined by the ACA) or potentially pay a tax penalty. In addition, the ACA reporting requirement under Code Section 6056 requires ALEs to submit annual reports to the IRS and written statements to employees that include data about medical plans offered, the cost of coverage and enrollment.
Provisions of the Affordable Care Act that apply to an ALE
The employer shared responsibility provisions; and the employer information reporting requirements for offers of minimum essential coverage. Whether an employer is an ALE is determined each calendar year and generally depends on the average size of an employer’s workforce during the prior year. For example, suppose an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the preceding year. In that case, the employer is not an ALE for the current calendar year. Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting requirements for the current year. Employers, not ALEs, may be eligible for the Small Business Health Care Tax Credit and can find more information about how the Affordable Care Act affects them on the ACA Tax Provisions for Small Employers page.
Full-time Employees and Full-Time Equivalent Employees
- 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 ALE for the current calendar year. It is, therefore, subject to the employer shared responsibility provisions and the employer information reporting requirements.
- A 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.
- An ALE need not offer minimum essential coverage to its part-time employees to avoid an employer shared responsibility payment. A part-time employee’s receipt of the premium tax credit for purchasing coverage through the Marketplace cannot trigger an employer shared responsibility payment.
- ALEs also furnish employees with a statement that includes the same information provided to the IRS. Employees may use this information to determine whether they may claim the premium tax credit on their individual income tax returns for each month of the calendar year.
What’s stopping you from trying the Applicable Large Employer (ALE) Calculator?
The applicable large employer calculator is the perfect tool for those with 25 full-time, non-seasonal employees or more. Get a personalized report showing any penalties you may face. Enter your information to get your free download today!