Applicable Large Employers (ALEs) with more than 50 full-time employees on business days in the prior year must comply with the Affordable Care Act. This compliance requires offering affordable, minimum essential coverage providing minimum value to full-time employees and their dependents. It also requires distributing 1095 forms to all full-time employees and those employees with health coverage (whether full-time or not) and transmitting information to the IRS with Form 1094.
Small employers part of a larger organization may be subject to ACA requirements if they are part of a controlled group. Any organization with multiple employer identification numbers should thoroughly review the ACA controlled group rules to determine which EINs have an ACA requirement. If part of a controlled group, employees of all controlled group members are counted in determining if the 50 full-time employee threshold is met for an ALE determination.
Under the employer shared responsibility rules, an employer is part of a controlled group if the employer has a common owner or is otherwise related.
There are three types of controlled groups: Parent/Subsidiary; Brother/Sister and combined.
Employers that think they are small employers but have affiliated companies should review the rules to determine if they are members of a controlled group and subject to ACA requirements.