Every aspect of ACA reporting is complicated. Sometimes it can be difficult to determine whether or not you are even a mandated reporter. Keep reading for an easy guide to determining your ALE status.
What Defines ALE Status?
Under the Affordable Care Act (ACA), an applicable large employer (ALE) is defined as any employer with 50 or more full-time or full-time equivalent employees.
These employers are considered to be mandated reporters under the ACA. Therefore, they must file forms 1094 and 1095 to the IRS each tax year.
This reporting is designed to prove that these mandated reporters are adhering to the ACA requirements.
The IRS mandates that all must ALEs offer their full-time employees health insurance coverage that fits the affordability and quality requirements laid out in the ACA.
Who Does The ACA consider a Full-Time Employee?
The ACA defines a full-time employee as working 30 hours a week and a total of 120 hours per month.
A full-time employee must be made an offer of affordable health insurance coverage within 90 days of their hire date.
Who Does The ACA Consider A Full-Time Equivalent Employee?
A full-time equivalent is an employee who works less than 30 hours a week. Separately these employees are not full-time, however, collectively they may add up to one full-time employee or more. Some examples of full-time exempt employees are…
Variable hour employees
What Is An Aggregate Employer?
If you are an aggregate employer, you can easily mistake your ALE status.
An aggregated applicable large employer (AALE) consists of several related business entities. These entities generally have a parent or subsidiary company connecting them.
Owners of multiple businesses are treated as one single employer under the ACA.
For example, if you own 3 businesses with 20 Full-time employees each, you may not think that you are an ALE, but the IRS does.
These employees must be considered collectively, not separately. Under the ACA, this employer has 60 Full-time employees, and is considered an ALE.
AALEs must combine their 1094 and 1095 Forms from all of their EIN’s and submit them to the IRS together.
How Can I be Sure of My ALE status?
Determining your ALE status may not be as straightforward as it may appear initially. The experts at ACAwise are here to make it easier.