Club Insider

Gearing Up for Government Hoops Such As ALE

  • For this article, Log In to:
  • View eVersion View eVersion | Download PDF Download PDF

Melissa KnowlesMelissa Knowles

As you gear up for year-end and all the important reporting requirement hoops through which you'll need to jump, now is the perfect time to start getting prepared for compliance in 2018! Time spent preparing now will make year-end 2018 a breeze. In the meantime, we still have 2017 to consider. First up, the Affordable Care Act. One of the biggest reporting and compliance demands comes courtesy of the ACA. As we head into Year Two of the full reporting requirements, one of the first items you'll need to determine is if your business qualifies as an Applicable Large Employer (ALE). Two of the ACA provisions apply only to ALEs:

  • The Employer Shared Responsibility Provisions; and
  • The employer information reporting provisions for offers of Minimum Essential Coverage (MEC).

Your determination as an ALE happens yearly and depends on the average size of your workforce during the prior year. If you had fewer than 50 full-time employees, including full-time equivalent employees (FTEs), on average, during 2016, you wouldn't be considered an ALE for the 2017. If you had more than 50 full-time employees, including full-time equivalent employees (FTEs), on average, during 2016, you would be considered an ALE for 2017 and be subject to the Employer Shared Responsibility Provisions and the employer information reporting provision.

To determine your workforce size for 2016, add your total number of full-time employees (30+ hours per week on average or at least 130 hours for the calendar month) for each month of 2016 to the total number of FTEs for each calendar month of 2016. Divide this total by 12. If you were only in business for part of 2016, use those months during the calculation and divide by the total number of months you were in business.

An FTE is a combination of part-time employees who, in combination, are equivalent to a full-time employee. To determine your number of FTEs for a month, combine the number of hours for all non-full-time employees for the month but do not include more than 120 hours per employee. Divide the total by 120. The resulting number is your FTE count. It should be noted that FTEs are only relevant in determining if you're an ALE. If you're determined to be an ALE, you DO NOT need to offer MEC to part-time employees.

To view the full article, please Log In.

If you are not a Paid Subscriber, we welcome you to Subscribe Now.

Back to Edition