Employers need to keep in mind that it is important to know how many full-time employees you have in order to ensure compliance with the employer shared responsibility ("pay or play") provisions of the Affordable Care Act, which apply to applicable large employers (ALEs).

Determining ALE Status
Whether an employer is considered an ALE for a particular calendar year depends on the size of its workforce during the preceding calendar year.

For example, employers will use information about the size of their workforce during 2017 to determine if their company is an ALE for 2018.

Employers with an average of at least 50 full-time employees in the preceding calendar year, including full-time equivalent employees, are generally deemed ALEs for the current calendar year.

Identifying Full-Time Employees
In general, for purposes of "pay or play":

• A full-time employee is, for a calendar month, an employee who is employed on average at least 30 hours of service per week. However, 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.
• 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 additional rules on determining who is a full-time employee, including what counts as an hour of service, see the IRS guidelines, here.

Please contact us with your questions about counting employees for ACA compliance.

Preferred Partner of