Employers with 50 or more full-time or full-time equivalent employees are subject to the Employer Shared Responsibility provisions under health care reform. Employers with fewer than 50 employees are not considered large employers for health care reform and do not have to comply with employer shared responsibility provisions or reporting requirements of the Affordable Care Act.
Calculating the number of full-time employees is important under health care reform.
To calculate the number of employees, add the total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year, and then divide by 12. A full-time employee is one who works 120 or more hours per month (different from the full-time calculation for ongoing employees, which is 130 hours per month).
For more information, refer to the IRS publication on determining large employer status which can be found by clicking here.