Is my business an Applicable Large Employer (ALE)?
Our Full-Time Equivalent (FTE) Calculator provides an estimate to help you assess whether your business might be considered an Applicable Large Employer (ALE) under the Affordable Care Act (ACA). Use it as a guide to better understand your company’s potential healthcare obligations. Enter your employee data below to get started.
Full-Time and Full-Time Equivalent Employees
Under the Affordable Care Act (ACA), businesses with a total of 50 or more Full-Time and Full-Time Equivalent (FTE) employees are considered Applicable Large Employers (ALEs) and may be required to provide health insurance.
Full-Time Employees
A full-time employee for any calendar month is an employee who has on average at least 30 hours of service per week during the calendar month, or at least 130 hours of service during the calendar month.1
Full-Time Equivalent
A full-time equivalent employee is a combination of employees, each of whom individually is not a full-time employee, but who, in combination, are equivalent to a full-time employee.1
1 IRS.gov, Determining if an Employer is an Applicable Large Employer
Full-Time Equivalent (FTE) Calculator
This calculator helps you estimate your FTE count to see if your business qualifies as an ALE.
Step-by-Step Guide:
Step 1:
Enter the number of full-time employees* for each month.
Step 2:
Enter the combined total hours worked by all part-time employees** each month, but do not include more than 120 hours of service per PT employee.***
Step 3:
The calculator will convert part-time hours into FTEs and calculate the average FTEs across the year.
Step 4:
If your average FTE count is 50 or more, you may be considered an ALE.
* Full-time employees are those who work 30 or more hours per week.
** Part-time employees are those who worked on average less than 30 hours per week, but more than 120 days per year.
*** If the total number of hours worked isn’t a whole number, round down to the nearest whole number.
Don’t include:
- Owners of a sole proprietorship.
- Partners.
- Shareholders owning more than 2% of an S corporation or more than 5% of a C corporation.
- Owners of more than 5% of other businesses.
- Seasonal employees working 120 days or less in a year.
- Independent contractors (form 1099 workers).
- COBRA and retired enrollees.
- Family members or members of the household who qualify as dependents on the individual income tax return of a person listed above, including a spouse, child (or descendant of a child), sibling or step-sibling, and parent (or ancestor of a parent), step parent, niece or nephew, aunt or uncle, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
All information provided herein is sourced from materials believed to be reliable; however, Decisely does not guarantee its accuracy or completeness. Any reliance on this information is at your own risk. Decisely assumes no responsibility for any errors, omissions, or any consequences arising from the use of this information. We strongly encourage users to verify details independently and seek professional advice before taking any actions that may involve personal or business liabilities.