Content updated May 29, 2018
When counting heads to see whether a business is large enough to need to comply with the Affordable Care Act, a company has to start by looking at the service hours of every worker. But in the tally toward that all-important threshold for an Applicable Large Employer – 50 full-time employees, including equivalents – you can take some heads out of the ALE count.
Time element for the ALE calculation
Employee head count is calculated for the workforce of the previous calendar year.
- Add the number of full-time employees for each month of the prior year to the number of full-time equivalents for the prior year.
- Divide the total by 12.
The best known of head-count exclusions that can be taken is that for seasonal workers. The key thing to remember with this exclusion is the definition of “seasonal.” According to ACA regulations, the time over which these workers were employed can only be a period of 120 days or less.
Defining ‘seasonal’ workers
In our educational ACA for Santa video, Confused about the Affordable Care Act and Whether Your Business Needs to Comply? Santa Is Trying to Figure This All Out, Too, we use the example of three groups of elves employed by Santa at three different stretches of time during the year.
Only one group of elves at ‘No Coal for You’ Studio fits the ACA definition of “seasonal.”
- The Painter elves, who worked over a 212-day period from 1/1/2018 to 7/31/2018, are not seasonal workers.
- The Production elves, who worked over a 137-day period from 8/1/2018 to 12/15/2018, are not seasonal workers.
- The Wrapper elves, who worked over a 54-day period from 11/1/2018 to 12/24/2018, are seasonal workers.
And although the Wrapper elves’ shifts make for the only full-time schedule at No Coal for You – and they do bring the studio’s FTE count to above the