Starting in 2015, the Patient Protection and Affordable Care Act (ACA) imposes “shared responsibility” tax penalties on “Applicable Large Employers” (ALEs) who fail to offer their full-time employees health care that meets the ACA requirements for coverage and affordability. ALEs are employers with at least fifty full-time and full-time equivalent (FTE) employees (for 2015, this number is increased to 100), and shared responsibility tax penalties are imposed on ALEs in relation to the number of their full-time employees (but not their FTEs). It is important, therefore, that ALEs correctly determine exactly which of their employees are full-time for purposes of the ACA so they can anticipate—and avoid—shared responsibility tax penalties.

Republished with permission.