The Affordable Care Act’s (ACA) Employer mandate relies heavily on calculating your full-time equivalent employees (FTEs). This is because understanding the number of Ftes your company has allows you to determine if your company is considered an applicable large employer (ALE) and is even required to adhere to the employer mandate.

You can avoid the employer mandate’s two penalties if you’re an ALE that offers affordable health coverage that meets minimum essential coverage (MEC) to FTEs and their dependents at least annually.

However, in order to find out if these requirements apply to your business, you first must calculate your company’s FTEs to Determine Ale Status.

In this article, we’ll discuss what an FTE is, what your FTE number means if you’re an ALE, and how to calculate the number of FTEs in your organization.

Not sure if your organization has to offer health insurance? Check out our reference chart!