ACA compliance is easy to overlook when your organization is focused on benefits renewal, open enrollment, and planning for the year ahead. But changes in your workforce, or in how your health plan is funded, can change your responsibilities under the Affordable Care Act (ACA). One of the biggest misconceptions is that ACA compliance only applies to companies with 50 or more employees. It isn’t always that simple.
As you prepare for 2027, here are three questions worth asking:
1. Are You an Applicable Large Employer (ALE) Without Knowing It?
Under the ACA, an employer is generally considered an Applicable Large Employer (ALE) if it averaged 50 or more full-time employees, including full-time equivalents (FTEs), during the previous calendar year.
ALE status matters because it brings additional responsibilities related to the coverage you offer and the information you report.
Crossing 50 employees at some point during the year doesn’t necessarily mean those requirements apply right away. ALE status is generally determined by averaging your full-time employees and FTEs across the entire previous calendar year. If that average reaches 50 or more during 2026, your organization would generally become an ALE beginning January 1, 2027.
That makes the remainder of 2026 an important planning window. If your organization has grown, added locations, changed staffing levels, or is approaching the 50-employee mark, now is a good time to understand where you stand before the new year arrives.
2. If You’re an ALE, Are You Prepared for What Comes Next?
Becoming an ALE isn’t simply a matter of checking a box. ALEs are generally required to offer qualifying health coverage to full-time employees and meet ACA requirements for affordability and minimum value. They also have annual reporting responsibilities using Forms 1094-C and 1095-C.
Affordability deserves particular attention as you shape your benefits program. The ACA provides several safe harbors employers can use to determine whether an offer of coverage is considered affordable. Those calculations can affect how you structure employee contributions which makes this a decision worth making before open enrollment, not after the plan year has already begun.
For employers approaching ALE status, preparing now can make the transition much easier. That preparation may include reviewing employee counts, understanding which employees are considered full-time under ACA rules, evaluating plan affordability, and confirming your HR and payroll systems are ready for future reporting requirements.
3. What If You’re Not an ALE?
This is where many smaller employers get caught off guard. Having fewer than 50 full-time equivalent employees doesn’t necessarily mean you have no ACA reporting responsibilities. If your organization sponsors a self-funded or level-funded medical plan, different ACA reporting requirements may apply regardless of your employee count.
For example, a smaller employer with a level-funded plan may be responsible for filing Forms 1094-B and 1095-B, because the plan is treated as self-funded for ACA reporting purposes. A similarly sized employer with a fully insured plan generally wouldn’t have that same filing responsibility.
In other words, “Are we under 50 employees?” isn’t the only question that matters. You also need to ask: “How is our medical plan funded?”
Together, those two questions help determine which ACA reporting requirements apply to your organization.
Now Is the Time to Ask the Questions
ACA requirements can vary depending on your employee count, workforce structure, plan funding, and coverage, which is why the months leading into a new year are the right time to confirm what applies to your organization.
Start with three questions:
- Has our employee count changed our ALE status?
- If we’re an ALE, are we prepared for our ACA requirements?
- If we’re level-funded, do we have ACA reporting responsibilities even if we’re not an ALE?
If you’re not confident in the answers, it’s worth finding out before the new year.
Silberman Group Can Help
At Silberman Group, we help employers understand their benefits and compliance responsibilities before they become last-minute problems.
Whether you’re approaching the ALE threshold, reviewing the affordability of your coverage, determining which ACA forms apply to your organization, or preparing for annual reporting, our team can help you understand what applies and what steps to take next.
We also offer 1095-B reporting support for level-funded small groups – helping clients collect the necessary coverage data, prepare the required forms, and electronically file them with the IRS.
Not sure what your organization needs to do before 2027? Talk with our team
