The employer shared responsibility provisions were added to the Internal Revenue Code by the Affordable Care Act (ACA). Under these provisions, certain employers (called applicable large employers or ALEs) must either offer health coverage that is “affordable” and that provides “minimum value” to their full-time employees (and offer coverage to the full-time employees’ dependents), or potentially make an employer shared responsibility payment to the IRS, if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on a Health Insurance Marketplace (Marketplace), also called the Exchange.
Under these provisions, certain employers (called applicable large employers or ALEs) must either offer health coverage that is “affordable” and that provides “minimum value” to their full-time employees (and offer coverage to the full-time employees’ dependents), or potentially make an employer shared responsibility payment to the IRS, if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on a Health Insurance Marketplace (Marketplace), also called the Exchange.
Whether an employer is an ALE and is, therefore, subject to the employer shared responsibility provisions depends on the size of its workforce. In general, employers employing at least a certain threshold number of employees (generally 50 full-time employees including full-time equivalent employees, which means a combination of part-time employees that count as one or more full-time employees) are ALEs.
Employers subject to the employer shared responsibility provisions, called applicable large employers or ALEs, are required to report under section 6056. An ALE is an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year.
Consult your tax advisor for rules as they apply to your specific situation prior to implementing any ACA reporting.
