Benefits & ACA
ACA Headcount Monitoring for Applicable Large Employer Status
A repeatable monthly process for tracking full-time employees, full-time equivalents, and controlled-group implications before year-end reporting begins.
Why monthly tracking matters: Applicable Large Employer status for a calendar year generally depends on the employer's average workforce during the preceding calendar year.
The federal threshold
An employer is generally an ALE when it averaged at least 50 full-time employees, including full-time-equivalent employees, during the prior year. A full-time employee generally averages at least 30 hours of service per week or 130 hours in a month.
Calculate each month
- Count employees who met the full-time standard for the month.
- Total the hours of service for non-full-time employees, capped at 120 hours per employee.
- Divide that total by 120 to determine monthly full-time equivalents.
- Add full-time employees and full-time equivalents.
- Average the 12 monthly totals for the annual determination.
Controls that prevent surprises
- Include controlled-group entities in the ALE determination.
- Track seasonal-worker facts before relying on the seasonal-worker exception.
- Reconcile hours between payroll, HRIS, leave, and staffing records.
- Document acquisitions, new entities, and workforce transfers.
- Distinguish ALE counting from the separate process for identifying employees who must receive Form 1095-C.
Primary sources
This resource is provided for general educational purposes and does not constitute legal, tax, benefits, or other professional advice. Requirements vary by organization and jurisdiction. Confirm current rules with authoritative sources and qualified advisors.
Back to Resources