An employer with an average of 50 or more full-time (FT) plus full-time equivalent (FTE) employees for the 12 months of the 2018 calendar year is an ALE for the entire following (2019) calendar year, even if its size drops below 50 in 2019.
Conversely, an employer with an average of less than 50 FT+FTE employees for the 12 months of the 2018 calendar year is not an ALE for the 2019 calendar year, even if its size grows to 50 or more in 2019.
It is very important to make this determination now, at the beginning of the year, so employers that need to comply with the ACA’s employer mandate can do so. First-time ALEs are provided transition relief by the IRS, which allows eligible employers up to a three-month window (by April 1st annually) to comply with the ACA’s employer mandate.
As a reminder, the ACA’s employer mandate (along with associated noncompliance penalties) is still in full effect for 2019. The ACA’s individual mandate penalty, however, is reduced to $0.00 beginning in January 2019.