Applicable Large Employers (ALEs) are employers that average 50 or more Full Time (FT) + Full Time Equivalent (FTE) employees, as of January 1st annually, according to all 12 months of the preceding calendar year. ALEs must comply with the ACA’s employer mandate and must report on compliance (or non-compliance) with the employer mandate at the conclusion of each corresponding tax year.
An ALE may be a single company or may consist of multiple companies that are combined because of common ownership (such as parent and subsidiary entities or other related/affiliated entities), which the IRS calls a Controlled Group.
It is imperative for a CPA or tax professional to make this determination if common ownership is a factor.
Under the employer mandate, ALEs must offer affordable health insurance coverage — that provides Minimum Value (MV) and is at least Minimum Essential Coverage (MEC) — to all FT eligible employees. ALEs must also offer at least MEC to FT employees’ dependent children up to age 26.