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Compliance with the employer mandate in the ACA isn’t hard with the right reporting system and technology. In this post, we’ll shine a light on what you need to know and do to comply. When you’re done, get in touch with us and see how our solution can help. At Lumity, we’re all about helping you create a benefits program to meet your company goals and those of your employees. ACA compliance is just one facet of this.

WHAT IS AN APPLICABLE LARGE EMPLOYER (AND WHY DOES IT MATTER)?

The employer mandate requires that Applicable Large Employers, or ALEs, offer health insurance to a minimum portion of their employees. First, then, you need to determine whether or not you are an ALE.

For 2015, an ALE is an employer with 50 or more full-time equivalent employees in 2014. If you had more than 100 regular, full-time employees you can quickly make that determination. Congratulations! You are an ALE and can skip ahead. Others, keep reading.

While counting your employees might seem pretty simple, governmental regulation has rendered it a little murky. You’ll need to take a couple of counts into consideration.

Notice we have used the terms “regular, full-time” employees and “full-time equivalent” (or FTE) employees. For this purpose, they are different. How?

You probably have a definition of full-time employee already. Usually it is someone who works 40 hours per week, 52 weeks per year. An FTE, though, is anyone who works, on average, 30 hours or more per week or 130 hours or more per month. Count them like this:

35 employees regularly work 30 or more hours per week.

-> 35 FTEs

Now you need to account for your less-than-30-hours employees. Count them up, and then total their average weekly hours worked. Multiple the number of these employees by the average weekly hours, then divide the total by 30. This results in another FTE figure, like this:

-> 32 employees each regularly work 25 hours per week.
-> 32 x 25 / 30 = 26.6 (~26 FTEs)

Now add the two together for your total number of FTEs:

-> 61 Total FTEs

If your FTE count comes in under 50, you are not subject to the employer mandate. You can be excused – although you may want to read more if your company is growing and you expect to have at least 50 FTEs in coming years.

Those employers with 50 to 99 FTEs are ALEs. If you fall into this category, keep reading to find out if you qualify for transition relief in 2015.

If you had at least 100 FTEs in 2014, you are definitely an ALE. Keep reading!


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