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Under the ACA, businesses with the equivalent of 50 or more full-time employees must offer affordable health care coverage by 2015 (federal mandated delayed from 2014) or be fined as much as $2,000 per employee, per year. The Kaiser Family Foundation created an Employer Penalty Flowchart that outlines the penalties you may face if you are not compliant with the Affordable Care Act.

Employers with less than 50 employers are not subject to the Employee Mandate.

To find out if you’re considered a “large” employer or not, you’ll need to calculate the total number of full-time equivalent (FTE) employees you have working for you each month of the year. The federal definition of a full-time employee is someone who works 130 hours or more in a calendar month.

  1. Determine your total number of full-time employees. How many employees worked 130 hours or more in a specific month?
  2. Determine the full-time equivalent for your part-time employees by adding together the hours of each employee who worked 130 hours or less during that same month. Divide the total by 120. This will give you the full-time equivalent for your part-time workers.
  3. Add the number of full-time employees to the number of full-time equivalents to get the total number of full-time-equivalent employees.

FTE Calculator



Large employer = 50 or more full-time equivalent employees? You are subject to the employer coverage mandate.
Small employer = 49 or less full-time equivalent employees? You are not subject to the employer coverage mandate.

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