Use this calculator to estimate whether your organization qualifies as an Applicable Large Employer under the Affordable Care Act, based on prior-year workforce data. ALE status generally applies when an employer averaged 50 or more full-time employees ( including full-time equivalents) during the preceding calendar year. Enter your monthly full-time headcount and total part-time hours for each month to see your estimated result.

What Is an Applicable Large Employer Under the ACA?

An Applicable Large Employer is an organization that employed an average of 50 or more full-time equivalent employees during the prior calendar year. ALEs are subject to the ACA’s employer shared responsibility provisions (commonly called the employer mandate) which require them to offer affordable, minimum-value health coverage to full-time employees and their dependents, or risk penalties under Section 4980H. They are also required to file annual ACA information returns with the IRS (Forms 1094-C and 1095-C) and furnish 1095-C forms to full-time employees.

ALE status is determined annually based on the prior year’s workforce data — not the current year. An employer who crosses the threshold in 2025 becomes subject to the employer mandate in 2026. An employer who falls below the threshold in 2025 exits ALE status in 2026, though prior-year obligations (filings, penalty assessments) remain.

For a plain-language overview of what ALE status means in practice, see so you’re an applicable large employer — now what?.

How to Calculate FTE for ACA and Determine ALE Status

The calculator above uses the IRS method for ALE determination. Here’s what it’s doing under the hood — step by step — so you can verify the logic or run it manually if needed.

Step 1: Count Full-Time Employees for Each Month

Under the ACA, a full-time employee is someone who averages at least 30 hours of service per week, or 130 hours per calendar month. Count these employees for each of the 12 months of the prior calendar year. Paid time off counts toward those hours. For the IRS definition in full, see IRS guidance on identifying full-time employees.

Step 2: Add Part-Time Employee Hours for That Month

For each month, total the hours of service worked by all employees who are not full-time, including part-time, variable-hour, and seasonal workers. Do not include more than 120 hours per individual employee per month in this total. Hours above 120 per person are capped and excluded from the calculation.

Step 3: Convert Part-Time Hours Into Full-Time Equivalents

Divide the total capped part-time hours for the month by 120. The result is the number of full-time equivalents that month’s part-time workforce represents. This is a calculation device — it does not mean any specific part-time employee is being counted as full-time. FTEs are used only to determine whether the employer crosses the ALE threshold.

Step 4: Add Full-Time Employees and FTEs for Each Month

Add the full-time employee headcount from Step 1 to the FTE count from Step 3. The result is the ACA employee total for that month. Record this number for each of the 12 months.

Step 5: Average the 12 Monthly Totals

Add all 12 monthly totals and divide by 12. If the average is 50 or more, the employer is likely an ALE for the following calendar year. If it’s below 50, the employer is likely not an ALE, though this should be confirmed against the edge cases in Step 6.

Step 6: Confirm Whether Special ACA Rules Change the Result

Several situations can affect the calculation in ways the calculator above doesn’t capture:

• Controlled groups: Related entities under common ownership or control may be required to aggregate their employee counts for ALE determination, even if no single entity exceeds 50 FTEs on its own.
  
•  Seasonal worker exception: An employer is not an ALE if its workforce exceeded 50 FTEs for 120 days or fewer during the prior year, and the employees who pushed the count above 50 were seasonal workers employed for no more than 120 days.
  
• New employers: An organization that didn’t exist for the full prior calendar year uses a reasonable projection of its workforce size for the months it did exist.
  
• Mid-year acquisitions or mergers: Changes in entity structure during the measurement year require specific treatment under IRS guidance and may require legal or benefits counsel to work through.

Note: The calculator provides an estimate, but these edge cases (especially controlled group rules) can change the result significantly. Confirm your final ALE determination with your benefits advisor or ERISA counsel.

What the ALE Calculator Does and Does Not Tell You

The calculator estimates your ALE status based on the monthly headcount and part-time hours data you enter. It does not:

•   Apply controlled group or aggregated ALE rules — if your organization is part of a related entity structure, your actual threshold may be higher than the calculator shows
• Account for the seasonal worker exception — if your workforce spike is driven entirely by seasonal employees working 120 days or fewer, you may not be an ALE even if the monthly average exceeds 50
•  Determine whether your health plan meets ACA affordability or minimum value standards
•  Calculate your penalty exposure or reporting obligations
•  Replace legal or compliance advice

What it does give you is a working estimate so you can make an informed decision about whether to engage further with ACA compliance planning.

What to Do If You Qualify as an ALE

If the calculator suggests you’re an ALE — or close to the threshold — there are several things to address before the plan year begins.

• Verify the result: Run the controlled group analysis if applicable, confirm the seasonal exception doesn’t apply, and get a final determination from your benefits advisor.
  
• Review your coverage offering: Confirm that your health plan meets minimum value (covers at least 60% of expected costs) and that employee contributions for self-only coverage don’t exceed the ACA affordability threshold — 9.96% of household income in 2026.
  
• Set up ACA tracking: ALE status triggers year-round obligations, not just annual filings. You’ll need to track monthly employee hours and offer-of-coverage status consistently throughout the year, particularly for variable-hour and part-time employees.
  
• Plan for 1094-C and 1095-C reporting: ALEs must file these forms annually with the IRS and furnish 1095-C forms to all full-time employees. Electronic filing is required if you’re submitting 10 or more returns.
  
• Engage an ACA compliance platform or service: Manual ACA tracking is feasible at smaller scale but becomes error-prone as headcount grows. Purpose-built tools handle measurement period tracking, code determination, and IRS filing in ways that spreadsheets typically can’t sustain.

For a detailed walkthrough of what ACA reporting involves, see our ACA reporting compliance overview. Our ALE status determination worksheet and ACA general definitions guide are also useful reference documents for teams working through this for the first time.

Frequently Asked Questions About the Applicable Large Employer Calculator

Do seasonal workers count toward ALE status?

It depends. Seasonal employees count toward monthly headcount in the standard calculation, which is what the calculator above uses. However, the IRS provides a seasonal worker exception: an employer is not an ALE if its workforce exceeded 50 FTEs for 120 days or fewer during the prior year, and the employees who pushed the count above 50 were seasonal workers employed for no more than 120 days. If your above-50 months are driven entirely by seasonal staff and fall within that 120-day window, you may qualify for the exception even if the calculator shows an average above 50. This requires careful documentation and confirmation with your advisor.

Do owners or family members count in the ALE calculation?

Generally, sole proprietors, partners in a partnership, 2% S-corp shareholders, and their family members are not counted as employees for ALE determination purposes. W-2 employees (including family members on payroll)  typically do count. The rules differ by entity type, so if your organization has significant owner or family involvement, confirm the treatment with your benefits counsel before finalizing your headcount.

What if my company has multiple related entities?

This is the most commonly missed complexity in ALE determination. Under the ACA’s controlled group rules, related entities under common ownership or control, like parent-subsidiary groups, brother-sister groups, and affiliated service groups, may be required to aggregate their employee counts. An employer with 30 employees that is part of a controlled group with a 40-employee affiliate may be treated as an ALE even though neither entity exceeds 50 on its own. If your organization has related entities, the calculator’s result is not reliable without first running the controlled group analysis.

Can I be an ALE even if I have fewer than 50 full-time employees?

Yes, because ALE status is based on full-time equivalents, not just full-time employees. An employer with 35 full-time employees and a large part-time workforce can cross the 50 FTE threshold once part-time hours are converted and added. This is exactly why the calculation matters: a workforce that looks small in headcount terms can still trigger ALE status when part-time hours are properly counted.

Do part-time employees have to be offered coverage if I am an ALE?

No. The ACA employer mandate requires ALEs to offer coverage to full-time employees — those averaging 30 or more hours per week — and their dependents. Part-time employees are not required to be offered coverage under the employer mandate. However, part-time hours still factor into the FTE calculation that determines whether you’re an ALE in the first place. And some part-time employees may move in and out of full-time status depending on how their hours fluctuate, which is why ongoing hours tracking matters for ALEs with variable-hour populations.Questions about your ACA compliance setup and ALE status?

Talk to a Selerix ACA expert

Disclaimer: 
Selerix does not provide legal, regulatory, or tax advice. The information in this post is intended to provide a general overview and may not reflect all legal requirements applicable to specific situations. Employers should consult legal counsel for guidance on compliance matters.