What is an “Large Group Employer” and why does it matter?
The ACA requires Applicable Large Employers (ALEs) to offer affordable, minimum value coverage to their Full Time Employees or face thousands of dollars in penalties.
An Applicable Large Employer (ALE) is an entity (including a single employer or group of employers un-der common control) that employs an average of 50 Full Time Employees, including Full Time Equivalent employees (FTEs), per month in the previous calendar year. For 2015 compliance, employers are permitted to use any consecutive six-month period for the calculation
The number of FTEs is calculated by taking the total number of hours worked by all part-time employees in a month (up to 120 hours per month per employee), and dividing that sum by 120.
What do ALE’s need to do in 2015?
If its average number of Full Time Employees plus FTEs is 100 or more, and transitional relief requirements are satisfied*, the ALE will be subject to employer shared responsibility rules as of the first day of the plan year beginning on or after January 1, 2015. If transitional relief requirements are not satisfied, these ALEs will be subject to the employer shared responsibility rules as of January 1, 2015, regardless of their plan renewal date.
An ALE will need to determine how many of its employees are “Full Time” based on a 30 hour per week definition, and then offer affordable minimum value coverage to “substantially all” of its Full Time Employees, or potentially pay a penalty.