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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.
Request a Compliance ReviewRead the ALE Rules
Advisor reviewing employer coverage data during an ACA compliance screening

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, treat the affordability output as indicative and confirm against the current figures.

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.

Free tool · ACA employer mandate

Are You an Applicable Large Employer? ACA / ALE & Compliance Check

Once a business (or a commonly-owned group of businesses) averages 50 full-time-equivalent employees, the ACA employer mandate and IRS reporting kick in. Enter your headcount to see where you stand, add related businesses under common ownership, and screen your current coverage for potential red flags. This is an educational screening tool, not a compliance determination or legal/tax advice.

Average 30+ hours/week

Under 30 hours/week

Per part-timer

Common ownership (controlled group)

Businesses under common ownership are combined for ALE purposes under IRS rules (Internal Revenue Code §414). If you or your owner group own other businesses, add them here.

Optional — screen your current coverage for red flags

Only used if you offer coverage today. Leave blank to just check ALE status.

Four ways employers fund group health

Fully insuredFixed premium, carrier takes the risk. Simplest, least flexible.
Level-fundedFixed monthly cost with a potential year-end refund if claims run low.
Self-fundedYou fund claims directly with stop-loss protection. Most control and data.
ICHRA / QSEHRAReimburse employees for individual coverage instead of a group plan.

We quote the national carriers — Blue Cross, UnitedHealthcare, Cigna, Aetna — side-by-side with regional carriers and level-funded markets most brokers never show you.

Which one actually saves you money depends on your census, claims, and goals — that takes underwriting, not a calculator.

Get a 15-Minute Coverage Review →

Educational screening only — not a compliance determination or tax, legal, or accounting advice. ALE status uses your prior calendar year monthly average, and affordability can be met through the Federal Poverty Level (FPL), W-2, or rate-of-pay safe harbors; minimum-value, full-time, seasonal-worker, and controlled-group (common ownership) rules add nuance this tool does not fully model. Whether commonly-owned businesses actually aggregate depends on ownership percentages and family-attribution rules. 2026 figures shown; the IRS updates them annually. For any compliance or tax questions, consult your tax advisor or benefits counsel.

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

  1. Rev. Proc. 2025-25, § 3.02 — Internal Revenue Service (plan year 2026)Supports: The required contribution percentage the tool appliesVerified 26 July 2026
  2. 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

  1. 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
  2. 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

  1. 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.
50
Full-time plus full-time-equivalent employees that make an employer an ALE
95%
Share of full-time employees and dependents an ALE must offer coverage to
Free
No email, no account, no stored data — the calculation runs in your browser

Related resources

Continue learning

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.

Request a Compliance ReviewRead the ALE Rules