If your business hires extra help during the holidays, you might wonder if you’re required to offer health insurance. That depends on whether you’re an Applicable Large Employer (ALE) under the Affordable Care Act (ACA).
What’s an ALE?
You’re an ALE if you had 50 or more full-time employees (or equivalents) on average last year. If you are, you must offer affordable health insurance to at least 95% of your full-time employees and their children—or you could face penalties.
How to Count Employees
- Count full-time employees (30+ hours/week).
- Add part-time hours together and divide by 120 to get full-time equivalents (FTEs).
- Average the total number of full-time + FTEs for each month of the year.
Seasonal Worker Exception
You’re not an ALE if:
- You go over 50 employees for 120 days or fewer, and
- The extra workers are seasonal (like holiday retail staff).
So, if you usually have 40 employees and hire 80 more just for November and December, you likely don’t have to offer health insurance—as long as those extra workers are seasonal.
Quick Tip
“Seasonal worker” helps decide if you’re an ALE. “Seasonal employee” matters only if you’re already an ALE and need to track who’s full-time.
Bottom line: If your workforce only grows during the holidays, you may not be required to offer health benefits. But if you’re an ALE, you must offer coverage—or face penalties.
Source: Thomson Reuters