Why the Number of Employees Matters

December 21, 2015 Robert Sheen ACA Compliance, Affordable Care Act, Applicable Large Employer (ALE)

Employer benefits, opportunities and requirements under the Affordable Care Act are all dependent upon the employer’s workforce size, the IRS points out.

Generally, an employer with 50 or more full-time employees or equivalents is considered an applicable large employer. The vast majority of employers fall below the workforce size threshold for applicable large employers, or ALEs. A complete list of resources and news for ALEs is on the IRS at the Applicable Large Employer Information Center on IRS.gov/aca.

Companies that have:

• Fifty or more full-time equivalent employees, and thus are ALEs, will need to file an annual information return reporting whether and what health insurance was offered to full-time employees. In addition, an ALE is subject to the Employer Shared Responsibility provisions.
• Fifty or fewer employees generally are eligible to buy coverage through the Small Business Health Options Program. More information is at HealthCare.gov.
• Fewer than 25 full-time equivalent employees may be eligible for a Small Business Health Care Tax Credit to help cover the cost of providing coverage.

Regardless of size, all employers that provide self-insured health coverage to their employees must file an annual return reporting certain information for each employee they cover.

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