Applicable Large Employer (ALE)
An Applicable Large Employer (ALE) is a term used by the Internal Revenue Service (IRS) in the United States to refer to an employer who is subject to the employer shared responsibility provisions of the Affordable Care Act (ACA).
Under the ACA, ALEs are employers who have 50 or more full-time employees, including full-time equivalent employees (FTEs), on average during the prior calendar year. A full-time employee is defined as someone who works an average of 30 hours or more per week, and FTEs are calculated by combining the number of hours worked by part-time employees and dividing by 120.
ALEs are required to offer affordable health insurance coverage that meets minimum essential coverage standards to their full-time employees and their dependents or face penalties. The ACA also requires ALEs to report information about the health insurance coverage they offer to the IRS and their employees.
The determination of whether an employer is an ALE is made on a calendar-year basis, based on the number of employees they had during the prior calendar year. If an employer is determined to be an ALE, they are subject to the employer shared responsibility provisions for the current calendar year.
Overall, ALEs play an important role in the implementation and enforcement of the employer shared responsibility provisions of the ACA, and must ensure that they comply with the applicable regulations and requirements.
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