Employer Shared Responsibility FAQs:
Are companies with employees working outside the US subject to the Employer Shared Responsibility provisions?
Typically, for determining whether or not you’re an ALE (Applicable Large Employer), you’ll only take into account the work performed in the United States. In other words, if a foreign employer has a large workforce worldwide but doesn’t have at least 50 workers in the US, they wouldn’t be subject to the Employer Shared Responsibility provisions.
Are companies that employ US citizens working abroad subject to the Employer Shared Responsibility provisions?
If you employ US citizens abroad, you’d typically only be subject to Employer Shared Responsibility provisions if you have at least 50 FT employees performing work in the US. Generally, US citizens working only abroad will not be taken into consideration when determining ALE status.
How does an employer that wasn’t in existence throughout the preceding calendar year determine if it employs enough people to be subject to the Employer Shared Responsibility provisions?
If your business wasn’t in existence any day in the previous calendar year, you’d only be considered an ALE (and therefore need to file) if in the current year you’re expected to hire/employ an average of 50 or more full-time employees. To determine next year’s status (a.k.a. the year after the first year your business was in existence), you’ll use the same general rules as everyone else: counting up your full-time employees to determine if there are more than 50 of them.
If two or more companies have a common owner (or are otherwise related), are they combined to determine whether they employ enough people to be subject to the Employer Shared Responsibility provisions?
Yes, according to Section 4980H, in order to determine ALE status, you would need to combine the number of employees for any groups with a common owner, or that are otherwise related. If the combined total is more than 50 full-time employees, each employer is subject to the Employer Shared Responsibility provisions.
Do the Employer Shared Responsibility provisions apply to employers in states where a federally-facilitated exchange (or Marketplace) has been established on behalf of the state?
Yes. As an ALE, you’re subject to an Employer Shared Responsibility payment if at least one (1) of your FT employees receives a premium tax credit, which is only available to eligible individuals who receive coverage through a Marketplace.
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