ALE Determination

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For ACAPrime to determine your ALE status for 2024, we will need the following data:
  1. Transactional payroll records organized in a table or matrix (e.g. Excel Spreadsheet) with clearly labeled columns showing all applicable hours by employee by month or by pay period for 2023. Each employee row should at least display EE Name or Identifier / Date Range or Month / Total Hours worked.
  2. (Optional) Employee Counts by month for 2023 for any employees that are not represented in the hourly data.
Likewise to determine status for 2025, we will need 2024 data – and so on.
Note:  In ACA terms, an FTE (Full–Time Equivalent) is a way to calculate workforce size, not an actual full–time employee. It combines the hours of part-time workers to estimate the equivalent number of full–time employees. For example, two part-timers each working 60 hours per month would count as 1 FTE. Employers use FTEs to determine if they are an Applicable Large Employer (ALE) under ACA rules. FTEs are figurative and used only for compliance calculations.
Here are the details on the analysis that will be completed:

https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer

An example on what we will do in our analysis:
Example – Employer is an ALE
· Company Y has 40 full-time employees for each calendar month during 2018.
· Company Y also has 20 part-time employees for each calendar month during 2018, each of whom has 60 hours of service per month.
· When combined, the hours of service of the part-time employees for a month totals 1,200 [20 x 60 = 1,200].
· Dividing the combined hours of service of the part-time employees by 120 equals 10 [1,200 / 120 = 10]. This number, 10, represents the number of Company Y’s full-time equivalent employees for each month during 2018.
· Employer Y adds up the total number of full-time employees for each calendar month of 2018, which is 480 [40 x 12 = 480].
· Employer Y adds up the total number of full-time equivalent employees for each calendar month of 2018, which is 120 [10 x 12 = 120].
· Employer Y adds those two numbers together and divides the total by 12, which equals 50 [(480 + 120 = 600)/12 = 50].
· So, although Company Y only has 40 full-time employees, it is an ALE for 2019 due to the hours of service of its full-time equivalent employees.