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ACA ALE calculator: do you need to file 1095-C?
Employers that averaged 50 or more full-time employees, counting part-timers as full-time equivalents, must file Forms 1094-C and 1095-C. Enter last year's numbers month by month to find out where you stand.
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Short answer
An employer is an Applicable Large Employer (ALE) under the ACA for a year if it averaged at least 50 full-time employees, including full-time equivalents, during the previous calendar year. Full-time means at least 130 hours of service in a month (30 a week). Each month, the hours of everyone else (at most 120 per person) divided by 120 gives the full-time equivalents; average the 12 monthly totals and round down. ALEs file Form 1094-C and a Form 1095-C for each full-time employee.
- Hours of service include paid leave
- Related companies in a controlled group are tested together
- Seasonal worker exception: over 50 for 120 days or fewer
- Employees with TRICARE or VA coverage are left out of the count for those months
Last reviewed against the IRS ALE determination page and the Instructions for Forms 1094-C and 1095-C.
Your 2025 workforce Use the previous calendar year to decide 2026.
Full-time means 130 or more hours of service in the month. For part-time hours, add up everyone else's hours for the month, counting no more than 120 for any one person.
| Month | Full-time employees | Part-time hours | FTEs (hours ÷ 120) | Total |
|---|
How the ALE test works, step by step
- Count full-time employees each month. Anyone with 130 or more hours of service in the month, which is 30 hours a week on average. Paid leave counts as hours of service.
- Turn everyone else into full-time equivalents. Add up the month's hours for all other employees, with no more than 120 hours for any one person, and divide by 120. Keep the decimals.
- Add them together for a monthly total, then add up all 12 months.
- Divide by 12 and round down. An average of 49.9 rounds down to 49, so you're not an ALE.
- 50 or more means you're an ALE for the next calendar year, unless the seasonal worker exception applies.
A quick example: a business with 40 full-time employees and part-timers who together work 1,300 hours a month has 40 + (1,300 ÷ 120) = 50.83 each month. That averages 50.83 and rounds down to 50, so it's an ALE.
What being an ALE means
- Annual filing: a Form 1095-C for each employee who was full-time in any month, plus a Form 1094-C transmittal (see the Instructions for Forms 1094-C and 1095-C), due to the IRS by the end of March if you e-file (see deadlines). You file even if you don't offer health coverage.
- Employee copies: furnished by early March. Since 2024 employers can instead post a clear notice on their website that employees can request a copy (by the furnishing date, kept up through October 15) and send it within 30 days of a request.
- Employer shared responsibility: if you don't offer affordable, minimum-value coverage to at least 95% of full-time employees and their dependents, and a full-time employee gets a premium tax credit on the marketplace, you may owe an employer payment under section 4980H.
Common mistakes
- Counting only hours worked. Hours of service include paid vacation, holidays, sick days and other paid leave.
- Testing each company separately. Related companies under common ownership are tested as one group.
- Using the current year. This year's status depends on last year's workforce. A new business uses what it reasonably expects to employ.
- Rounding up. The average is always rounded down before comparing with 50.
- Counting TRICARE or VA-covered employees. For the ALE count, leave out an employee for any month they had TRICARE or Veterans Administration health coverage.
Related tools
- When 1095-Cs are due: the due date calculator.
- Do you have to e-file them? The 10-return rule counts 1095-Cs with your other information returns.
- Late or wrong forms: the information return penalty calculator covers 1095s too.
- Every form at a glance: the information return directory.
Sources
Questions
ACA employer questions
What is an Applicable Large Employer (ALE)?
Under the Affordable Care Act, an Applicable Large Employer is one that averaged at least 50 full-time employees, including full-time equivalents, during the previous calendar year. ALEs must file Forms 1094-C and 1095-C and are subject to the employer shared responsibility provisions.
Who counts as a full-time employee for the ACA?
Someone who averages at least 30 hours of service a week, or 130 hours in a calendar month. Hours of service include paid time off such as vacation, holidays and sick leave, not just hours worked.
How do I calculate full-time equivalents (FTEs)?
For each month, add up the hours of service of all employees who aren't full-time, counting no more than 120 hours for any one person, and divide by 120. Add that to the month's full-time count. Average the 12 monthly totals and round down to a whole number.
Which year's numbers decide whether I'm an ALE?
The previous calendar year's. Your 2025 workforce decides whether you're an ALE for 2026, which you report on 1095-Cs filed in early 2027.
What is the seasonal worker exception?
If your workforce exceeded 50 full-time employees and FTEs for 120 days or fewer during the year, and the employees above 50 during that period were seasonal workers, you aren't an ALE. The 120 days don't have to be consecutive.
Do related companies count together?
Yes. Companies in the same controlled group or affiliated service group are treated as one employer for the ALE test. Each member that is an ALE member then files its own 1094-C and 1095-Cs.
If I'm under 50, do I file anything?
Not 1095-Cs. But if you sponsor a self-insured health plan, you generally file Forms 1094-B and 1095-B to report who was covered. Employers with insured plans leave that to the insurance company.
Is anything I enter sent to EFileForMe?
No. The calculator runs in your browser. Your headcounts and hours aren't sent anywhere or saved.
File your 1094-C and 1095-Cs online
EFileForMe e-files ACA Forms 1095-C with the 1094-C transmittal, imports from a spreadsheet, checks your forms as you go and can print and mail employee copies.