Employer Mandate

Under Internal Revenue Code section 4980H, an Applicable Large Employer may be subject to a penalty if it does not offer its full-time employees, and their dependents, minimum essential coverage that is affordable and provides minimum value.

Who are Applicable Large Employers?

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An Applicable Large Employer (ALE) is one that employed an average of at least 50 full-time employees on business days during the preceding calendar year.  In general, the number of full-time employees is determined by taking the sum total of full-time employees, full-time equivalent employees and seasonal workers for each calendar month in the preceding calendar year and dividing by 12.

Additional information on determining whether an employer is an ALE, including how to calculate full-time equivalent employees, is outlined in our July 2014 Briefing, which you can find below.

Additional Information
Health Care Reform: Determining Applicable Large Employer Status
This Briefing explains how employers can determine if they are an Applicable Large Employer subject to Internal Revenue Code section 4980H.