An applicable large employer averages 50 or more full-time and full-time-equivalent employees in the prior year. ALEs are subject to the ACA employer mandate and to annual IRS coverage reporting.
Businesses under common ownership can be treated as a single employer. For the ACA, all employees of a commonly owned group are combined to test the 50 full-time-equivalent threshold for ALE status, though each company stays its own ALE member for penalties and reporting.
A seasonal employee works full-time hours but only for a limited part of the year. Under the seasonal-worker exception, an employer that exceeds 50 FTEs for no more than 120 days a year solely because of seasonal workers may not be treated as an ALE.
A full-time-equivalent (FTE) combines part-time hours to test ALE status: add the monthly hours of non-full-time staff (capped at 120 hours each) and divide by 120. FTEs count toward the 50-employee threshold but do not themselves have to be offered coverage.
Under the ACA, a full-time employee is one who averages at least 30 hours per week or 130 hours per month. This definition drives ALE status and determines who must be offered coverage.
An Applicable Large Employer (ALE) is one that averaged 50 or more full-time employees, including full-time equivalents, during the prior calendar year. ALEs are subject to the ACA employer mandate.