FOUNDATION ACA Solutions Help Keep Contractors Compliant

ALE stands for Applicable Large Employer and under ACA regulations, an ALE is required to offer health insurance to at least 95% of their employees and their children.

The ACA measures how many full-time employees, including full-time equivalents (FTEs), a company has. If a company has 50 or more full-time employees, the company is considered an ALE.

If a small company has common ownership with other companies, the full-time employees (including FTEs) at each individual company are combined. This creates an Aggregated ALE Group. Each company within the Aggregated ALE Group has to file their own reports.

A full-time equivalent employee is when the hours of multiple part-time employees are combined for ALE status calculations to equal that of a full-time worker.

The ACA considers 30 hours per week, or 130 hours in a month full-time.

An ALE will submit their 1094-C and 1095-C reports to the Internal Revenue Service as well as give a copy of the 1095-C report to each full-time employee.

ALEs must offer health insurance coverage to at least 95% of their employees and the employees’ children. The insurance must be both affordable and of minimum value.

• Affordable — costing less than 9.61% of the employee’s household income
• Minimum value — company covers no less than 60% of the cost of benefits incurred in the plan.

The ALEs are then required to file annual reports with the IRS as proof they're meeting all of the insurance requirements, fulfilling their reporting requirements and avoiding potential penalties. Finally, ALEs must give a copy of the 1095-C report to every full-time employee as evidence that the employee was or wasn’t offered coverage.

Yes. Every full-time employee is given a 1095-C report as proof they received or didn’t receive an offer of insurance.

No, you will still be compliant. The 95% rule is based on how many full-time employees are offered health insurance, not how many opt in.

An ALE must file two reports: a 1094-C and a 1095-C. One 1094-C is submitted to the IRS as a cover letter for all the 1095-Cs — which detail the coverage offered to the full-time employees and whether or not the employees accepted the offers. A 1095-C must also be given to every full-time employee at a company as evidence they either received or didn’t receive an offer of coverage.

Yes. ALE status is determined by the previous year’s annual labor report. If you have 52 full-time employees now and plan to have 46 next year, you’ll still be ALE throughout next year. If — by the end of next year — you continue to have less than 50 full-time employees, then your ALE status will be rescinded the year after.