You have to count both your full-time and full-time equivalent employees to find out if you qualify as an Applicable Large Employer.

7.6.15

There’s more to figuring out your how many full-time employees you have than just lining them up and counting. The Affordable Care Act (ACA) has specific rules to help you determine the number of full-time and full-time equivalent employees you have, which can determine how the ACA affects you.

When it comes to figuring out how many full-time equivalent employees you have to report, you’re going to need to do some math. Here’s a rundown of how to figure out the difference between your true full-time staff and full-time equivalent employees.

You have to count both your full-time and full-time equivalent employees to find out if you qualify as an Applicable Large Employer.

The Full-time Equivalency Equation

According to the ACA, a person is considered a full-time worker if they work an average of 130 hours per month. That may seem simple enough, but part-time employees can factor into your full-time equation as well.

Part-time employees can add up to become full-time equivalent employees. For example, two part-time employees who work 60 hours per month would be counted as the equivalent of one 120-hour full-time equivalent employee. To figure out your total number of full-time equivalents, add up the monthly hours of all of your part-timers and divide by 120. Your total would be the number of full-time equivalents that would count toward your overall total.

The Full-time Employee Threshold

The number of full-time and full-time equivalent employees you have is used to determine if you are subject to Employer Shared Responsibility (ESR). ESR requires that businesses with at least 50 full-time equivalent employees offer affordable health coverage or be subject to an ESR payment. If you’re under the 50 full-timer threshold, you aren’t considered an Applicable Large Employer.

How Apple Growth Partners Can Help

If you do fall over the 50 full-time employee threshold, you need to be ACA compliant. The ACA requires a lot of complex reporting, but we are here to help thanks to my aca partner, our reporting process that will keep you compliant with the regulations.

If you would like to learn more about how my aca partner can manage your reporting and track your full-time and full-time equivalent employees, please contact Vicki Trettel at 330.867.7350 to schedule an appointment with one of our experts.

Susan Burnoski, Director/Senior Manager – Audit & Assurance

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