Affordable Care Act
Large Employer Determination Worksheet
1
The Affordable Care Act requires “large employers” to offer coverage to their full-time employees or pay a penalty.
Employers determine whether they are required to offer coverage for any given year by looking back to the number of fulltime equivalent employees they employed on average during the prior year. The formula is shown below. The following
worksheet is intended to assist you in determining whether you are a large employer under the ACA.
Aggregate # hours worked
by part-time employees
# of Full-Time
Employees
# of Full-Time
Equivalent Employees
Divided by 120
Special Rule for 2014 Calendar Year Only
A special “transitional relief” rule permits employers to determine whether they are a large employer by only considering the
average number of full-time equivalent employees during any six consecutive calendar months during 2013.
In subsequent years, employers must consider the full 12 months (e.g. for 2015, the employer must consider the average
number of full-time equivalent employees during the 12 months of 2014).
Control Group Note
Under the IRS “controlled group” rules, employers must count and aggregate full-time equivalent employees of their company
and of any related company for purposes of determining whether they exceed the 50 full-time equivalent employee threshold.
Most companies rely on their accountant, legal advisor, or consultant for assistance with this determination.
Control Group Example
COMPANY A
determines that it
averaged only 49 fulltime equivalent
employees during
2013.
COMPANY A’s owner also
owns 80% of COMPANY
B that employs 2
individuals on a full-time
basis.
COMPANY A and COMPANY
B are considered part of a
“controlled group” of
employers.
The owner must combine
the full-time equivalent
employee count for
purposes of the Affordable
Care Act.
As a result, the owner is
considered to employ more
than 50 full-time equivalent
employees in both
businesses.
Both businesses are
required to offer health
coverage in 2014 to avoid a
penalty.
This information is provided for general guidance purposes only and is not intended as legal advice. Please consult your legal
advisor for additional information.
1
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Affordable Care Act
Large Employer Determination Worksheet
Action Item
Process/Definition
1. Count your “full-time
employees” for each
month of the year (or
partial year for 2013).

A full-time employee is any individual working 30 or more hours per week, on average.

Determination is made on a monthly basis, so an individual might be considered a fulltime employee in January, but only a part-time employee in February.
Example: COMPANY X has five employees
Place that number in
the correct box.
A averages 35 hours per week, B averages 45 hours per week
C averages 31 hours per week, D averages 29 hours per week and
E averages 20 hours per week
COMPANY X would be considered to have 3 “full-time” employees for the month.
STEP 1: Count Your Full Time Employees
January
May
September
February
June
October
March
July
November
April
August
December
2. Add up all hours
worked by your parttime employees for
each month of the
year (or partial year
for 2013).
Then divide by 120.

A “part-time employee” is any individual working less than 30 hours per week, on
average.

Add together all of the hours worked by part-time employees for the month. Don’t count
more than 120 hours per month for any part-time employee.

Divide this number by 120. This gives you a full-time equivalency.
Example: COMPANY Y has four part-time employees
A worked 100 hours in January, B worked 30 hours in January
C worked 65 hours in January, and D worked 90 hours in January
100 + 30 + 65 + 90 = 285 hours worked by part-time employees in January
285 ÷ 120 = 2.375
STEP 2: Full Time Equivalency Calculation
January
÷120 =
May
÷120 =
September
÷120 =
February
÷120 =
June
÷120 =
October
÷120 =
March
÷120 =
July
÷120 =
November
÷120 =
April
÷120 =
August
÷120 =
December
÷120 =
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Affordable Care Act
Large Employer Determination Worksheet
Action Item
Process/Definition
3. Add the numbers
from Step #1 and
Step #2.

Add the number of full-time employees (determined in Step #1) to the full-time
equivalency (determined in Step #2) and insert them in the box below.

This is your number of “full-time equivalent” employees for the month.
Example: COMPANY Z has 3 full-time employees in January and 2.375 full-time
equivalencies in January.
COMPANY Z has 5.375 full-time equivalent employees in January.
Step 3 = Step 1 + Step 2
Your Full Time Equivalent Employees
January
May
September
February
June
October
March
July
November
April
August
December
4. Determine your
yearly average of fulltime equivalent
employees.

Add up the numbers for each month in Step #3.

Divide by 12 (if you did not count all 12 months, divide by the number of months actually
counted). Disregard any fractions and round down.
Example: COMPANY X averaged 49.9 full-time equivalent employees for the 2013 plan year.
COMPANY X is considered to have employed only 49 full-time equivalent employees during
the year.

Employers who averaged 50 or more full-time equivalent employees during the 2013
calendar year will be considered a “large employer” for the 2014 calendar year. Be sure to
consider the seasonal employee rule in step #5.

Employers who averaged less than 50 full-time equivalent employees should make sure
they are considering all full-time equivalent employees within the controlled group of
employers.
Step 4 = Step 3 divided by 12 (or number of months counted)
Your Yearly Average of Full Time Equivalent Employees
Add up numbers for months in Step 3
Divide by 12
(Or divide by number of months counted in Step 3)
Yearly Average of Full Time Equivalent Employees
(Disregard any fractions and round down)
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Affordable Care Act
Large Employer Determination Worksheet
Action Item
5. Determine whether
you may disregard
seasonal employees
in determining
whether you are a
large employer.
Seasonal Employees
If you determine that:

You employed in excess of 50 full-time equivalent employees in the prior year, and…

Your workforce exceeded 50 full-time equivalent employees for 120 days or fewer, and…

The spike was due to an influx of seasonal workers, then…

You may disregard your seasonal workers for purposes of determining whether you
exceeded the 50 full-time equivalent employee threshold.
Example:
January - May
June - August
October December
January December
COMPANY Z
employed 30
full-time
equivalent
employees.
COMPANY Z
employed 100
full-time
equivalent
employees,
due to an
influx of
seasonal
employees.
COMPANY Z
once again
only employed
30 full-time
equivalent
employees.
COMPANY Z
employed 53
full-time
equivalent
employees
during the
year.
COMPANY Z only exceeded 50 full-time equivalent employees for less than 120
days, due to an influx of seasonal workers.
COMPANY Z may disregard the 70 full-time equivalent seasonal workers it hired
over the summer.
COMPANY Z is only considered to have 30 full-time equivalent employees during
those summer months.
COMPANY Z will not be required to offer coverage to avoid a penalty.
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