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ALE and ACA affordability calculator
This tool estimates whether your organization is an applicable large employer, and whether your current offer of coverage is likely to clear the ACA affordability and minimum-value tests. It runs in your browser, asks for no contact details, and returns a result immediately.
It is a screening tool, not a compliance determination. It tells you whether the question deserves a closer look, not whether you are compliant.
Key takeaways
- Counts full-time and equivalents. Part-time hours convert using the 120-hour rule.
- Aggregates commonly owned businesses. Most free ALE calculators ignore this entirely.
- Screens the 95% offer threshold. Against the share of full-time employees you say you cover.
- Tests affordability conservatively. Using the federal poverty line safe harbor, the strictest of the three methods.
- Free, with nothing stored. No email, no account, and no data retained.
What does this ALE calculator actually do?
It performs the applicable large employer count described in the IRS guidance, then applies two screening tests to the offer of coverage you describe. The ALE count is arithmetic and the tool follows it exactly. The affordability and minimum-value tests are screens: they use the figures the IRS publishes each year, applied to the single data point most employers can supply from memory — the monthly cost of self-only coverage.
Which figures does it use?
The tool applies the indexed figures for plan years beginning in 2026: the required contribution percentage set by Rev. Proc. 2025-25 and the § 4980H payment amounts set by Rev. Proc. 2025-26. The IRS has since published the corresponding figures for plan years beginning in 2027 in Rev. Proc. 2026-26 and Rev. Proc. 2026-22. If you are modeling a 2027 plan year, please utilize our 2027 ACA Calculator with updated ACA requirements.
What it does not do
It does not determine whether your entities form a controlled or affiliated service group under § 414 — it takes your answer at face value. It does not apply the W-2 or rate-of-pay affordability safe harbors, which usually produce a more favorable result than the federal poverty line method. It does not read your plan documents, and it cannot see hours of service that are not in the numbers you type.
2027 BENEFITS PLANNING TOOL | EMPLOYER CONTRIBUTION STRATEGY
2027 ACA Contribution Strategy Calculator for Employers
Measure employer contribution headroom, model your 2027 benefit costs, and verify ACA affordability before your benefits strategy is finalized.
1. Your Current Contribution Strategy
2. Your Workforce
Are your employees split among multiple companies?
Does the same owner or ownership group employ people through more than one business, LLC, corporation, partnership, or EIN?
Why we're asking Some businesses operate through multiple legal entities under the same or related ownership. For ACA Applicable Large Employer screening, employees of certain commonly owned or related businesses may need to be considered together. This calculator uses the information you provide to identify a potential aggregation issue, but it does not determine whether the entities are legally required to be aggregated under IRC §414. Example One ownership group operates Company A, Company B, and Company C. Each company employs 20 people. Although each company individually has fewer than 50 employees, the combined workforce is 60. Depending on the ownership structure, those employees may need to be considered together when determining ACA Applicable Large Employer status.Tell us about the other businesses in the ownership group
Enter workforce information for the other companies or entities that share common or related ownership with the employer you are evaluating.
Are employees from these related businesses covered under the same medical plan you are evaluating?
We ask because related businesses may be combined for ACA/ALE workforce screening even when they do not all participate in the same medical plan. Only employees participating in the plan being evaluated should be included in this participation screen.3. ACA & Plan Screening
4. Participation & Marketability
This section is a Texas group-health marketability / carrier participation screen. It is not an ACA compliance test.
Confirm which related businesses participate in this medical plan before relying on the participation result.
2027 CALENDAR-YEAR ACA AFFORDABILITY CALCULATOR
This early-access affordability screen is configured for plan years beginning January 1, 2027. The exact monthly FPL safe-harbor screening amount for the contiguous states and D.C. is $135.926, calculated from a $15,960 one-person poverty guideline and the 10.22% percentage (approximately $135.93). Because employee contributions are typically charged in whole cents, this calculator treats $135.92 as the conservative maximum monthly amount that does not exceed the unrounded threshold; entered amounts of $135.93 or more trigger the conservative review flag below.
Non-calendar-year plans may require a different applicable Federal Poverty Line. Employers may also use W-2 or Rate of Pay safe harbors. This educational tool does not make a formal compliance determination or IRS filing position.
2027 indexed amounts
Potential indexed employer shared responsibility amount: §4980H(a) annual $3,780 ($315.00 monthly equivalent) and §4980H(b) annual $5,670 ($472.50 monthly equivalent). The IRS determines actual liability based on applicable facts; these are not automatic fines or amounts owed.
Authority
IRS Revenue Procedure 2026-26, Section 3.02; IRS Revenue Procedure 2026-22; IRS Employer Shared Responsibility Questions and Answers; IRS Minimum Value and Affordability guidance; HHS/ASPE 2026 Poverty Guidelines.
2027 ACA calculator FAQ
Does $135.93 apply to every 2027 plan?
No. This early-access screen assumes a January 1, 2027 calendar-year plan. Later plan years may use a different applicable poverty guideline.
Does the screen calculate a fine?
No. It provides an educational screen only and does not calculate employer shared responsibility liability.
Educational screening only. This is not legal, tax, accounting, actuarial, payroll, ERISA, or formal ACA compliance advice. Results depend on the information entered and facts not collected here.
What the tool asks for, and why
- Enter your full-time employee count — anyone averaging 30 hours per week or 130 hours in a month.
- Enter your part-time headcount and their average weekly hours; the tool converts these into full-time equivalents.
- Add any businesses under common ownership so the group is tested together.
- Enter the percentage of full-time employees you offer coverage to, and the monthly self-only employee cost.
- Read the result as a prompt to investigate, then confirm it against your actual plan documents and payroll data.
Authoritative references
Authorities used for current calculations
- Rev. Proc. 2025-25, § 3.02 — Internal Revenue Service (plan year 2026)Supports: The required contribution percentage the tool appliesVerified 26 July 2026
- Rev. Proc. 2025-26, § 2 — Internal Revenue Service (plan year 2026)Supports: The section 4980H(a) and 4980H(b) amounts the tool reportsVerified 26 July 2026
Future plan-year authorities
- Rev. Proc. 2026-26, § 3.02 — Internal Revenue Service (plan year 2027)Supports: The 2027 required contribution percentage, not yet applied by the toolVerified 26 July 2026
- Rev. Proc. 2026-22 — Internal Revenue Service (plan year 2027)Supports: The 2027 section 4980H amounts, not yet applied by the toolVerified 26 July 2026
Explanatory guidance
- Determining if an Employer is an Applicable Large Employer — Internal Revenue ServiceSupports: The counting method the tool implementsVerified 26 July 2026
Published 26 July 2026. Last reviewed 26 July 2026. Next review on publication of the next IRS indexing adjustment. The tool currently applies 2026 plan-year figures only; a plan-year selector is scheduled. 4J Insurance is an independent commercial insurance brokerage, powered by PGI, based in Frisco, Texas. This tool provides general information and is not legal advice, tax advice, actuarial advice, or a compliance determination.
How the calculation works, and what it assumes
Assumptions you should know about
- Part-time hours are converted using the 120-hour divisor, and no employee contributes more than 120 hours in a month
- Full-time status is tested at 30 hours per week or 130 hours per month
- Affordability is screened against the federal poverty line safe harbor, the most conservative of the three methods
- Your answers about common ownership are accepted as given; the tool does not test the § 414 relationship
- Results reflect the plan-year figures noted above and are not updated to your specific plan year
Reading the result honestly
A result of “not an ALE” is only as good as the hours you entered. If you typed headcount instead of hours of service, or omitted paid time off, the count is low. A result of “affordability risk” means the federal poverty line method would likely fail — it does not mean you have a penalty, because the W-2 and rate-of-pay safe harbors may still apply and frequently do.
Neither result is a filing position. Both are prompts to check the underlying data.
What to do with each outcome
- Clearly under 50: keep the workpapers and re-run annually. Nothing further is required.
- Near 50: rebuild the count from payroll hours of service, month by month, and test all commonly owned entities together.
- Over 50 with a compliant offer: confirm the affordability method you rely on is documented and that Forms 1094-C and 1095-C are filed.
- Over 50 with flagged risk: have the offer, contribution structure and safe-harbor selection reviewed before the plan year begins.
Related resources
Continue learning
- What is an applicable large employer?
- How to calculate full-time equivalent employees
- ACA affordability and the safe harbors
- ACA compliance resources
Use a tool
Benefits tools and decision support — the rest of the tool cluster
Discuss the issue
Request an ACA compliance review — if the screen flags exposure, this is the next step
Calculator FAQ
How accurate is the applicable large employer result?
The arithmetic follows the IRS method exactly: full-time employees at 30 hours per week or 130 hours per month, plus part-time hours divided by 120 with a 120-hour cap per employee. Its accuracy depends entirely on whether you entered hours of service rather than headcount, and whether you included paid time off.
Does it handle businesses under common ownership?
Yes, and this is the main thing it does that most free calculators do not. You can add other commonly owned businesses and their full-time-equivalent counts so the group is tested together. It does not determine whether those entities legally form a controlled or affiliated service group under Internal Revenue Code section 414 — that determination belongs with your counsel or tax adviser.
Which affordability safe harbor does it use?
The federal poverty line method, which is the most conservative of the three. If the tool flags affordability risk, the W-2 or rate-of-pay safe harbors may still produce a passing result, and frequently do.
Can I rely on the result for filing?
No. It is a screening tool. It cannot see your plan documents, your payroll detail, your safe-harbor election or your entity structure, and it does not determine compliance.
What does minimum value mean in the tool?
A plan provides minimum value if it is designed to pay at least 60% of the total allowed cost of benefits. The tool asks you to state whether your plan meets that standard rather than calculating it, because the calculation requires plan design data the tool does not collect.
Why does the tool ask for the self-only cost rather than family cost?
Affordability under the employer mandate is tested against the cost of self-only coverage for the employee, not the cost of family coverage. That is why an offer can be affordable for mandate purposes even when family coverage is expensive.
A screening result is a starting point, not a filing position
If the tool flags exposure, the next step is reading your plan documents and payroll data against what the rules actually require.