Are you an employer required to offer employee health care coverage? According to the Affordable Care Act (ACA), if you have 50 or more full-time employees (or full-time equivalents) you qualify as an Applicable Large Employer (ALE) and certain employer shared responsibility provisions may apply to you. However, there is an exception for seasonal workers when determining your ALE status.
If you have more than 50 employees for a time span of 120 or less days during the calendar year and if the employees in excess of the 50 employee limit are seasonal workers, the you do not qualify as an ALE and are not subject to the employer shared responsibility provisions.
In this context, a seasonal worker is an employee who performs labor or service on a seasonal basis, e.g. holiday retail workers. Whether your employee is considered a seasonal worker versus a seasonal employee is of importance as they are used based on your ALE status.
The term seasonal worker is relevant specifically when determining if an employer’s ALE status. The term seasonal employee is used if the employer qualifies as an ALE and must calculate full-time equivalent employees. In the latter case, a seasonal employee is considered a full-time equivalent if he or she averages at least 30 hours of service per week for a calendar month. For more information on the differences between the two visit the IRS Q&A question #54.
Whether you are an ALE not only affects which provisions apply to you but also your reporting requirements and tax credits you could receive. Read our post on why workforce size matters or search our site for more info on how the Affordable Care Act (ACA) affects businesses and individuals. If you would like to read the final regulations and learn about other exceptions in the ACA visit the Federal Register or IRS/ALE.
If you don’t know how ACA might affect your payroll processing, we are here to help! We can be reached at (310) 534-5577 or [email protected].
