Applicable Large Employer (ALE)

Meaning & Definition

Applicable Large Employer describes the status of a business entity under the Affordable Care Act (ACA), which states that an employer can be considered an Applicable Large Employer if, during the preceding calendar year, that employer employed on average at least 50 Full-Time Employees, which also includes the equivalent of a Full-Time Employee as defined by the IRS overtime provisions.

Importance of Applicable Large Employer (ALE):

• This allows for the establishment of whether an employer is required to provide health insurance to their full-time employees
• HR, payroll benefits administration, and planning will be impacted.
• Employers can avoid fines due to healthcare regulations through this determination
• Will impact the structure of the workforce (which means it will influence the decision whether to hire full-time vs part-time employees).
• Assists in classifying employees for U.S. healthcare compliance reporting purposes.

Compliance Requirements:

The Affordable Care Act (ACA) defines ALE status.

Employers classified under ALE status are required to:

• Provide to qualifying employees a minimum important health insurance plan
• Meet standards related to Affordability and Minimum Essential Coverage
• Complete all necessary reporting requirements concerning health care

The specific regulations and requirements that apply to a given business depend on the number of employees and local laws.