ALE – the acronym for “Applicable Large Employer” that we keep hearing for companies required to comply with the Affordable Care Act – can pack meaning that is just as serious for smaller businesses.

ACA for Santa_combined ALE count_Integrity DataIf a company with under 50 full-time employees (including equivalents) is related to companies that meet IRS rules for being commonly controlled or affiliated, that company is an ALE Member of an ALE Group.

This fine-tuning of the ALE definition means that Affordable Care Act compliance requirements apply to every ALE Member – even when that company has nine full-time employees.

Santa companies ALE count_Integrity Data ACA ComplianceSuch is the case for Shiny Nose Brigade, the smallest of Claus Resources companies featured in our whimsical example of ACA compliance must-knows for Santa. (See our 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.)

IRS Controlled Group Rules_Integrity Data ACA ComplianceOn its own, Shiny Nose Brigade – like N Squared Solutions, Rent a Righteous Santa, and ‘No Coal for You’ Studio – does not have the head count to be an ALE.

If they were not related, compliance requirements of the Affordable Care Act would not apply to any of these companies. But because their combined head count is over the 50 FTE threshold for ALE status, the Affordable Care Act applies to each of these companies in the U.S. operations of Claus Resources.  

When are ALE head counts combined?