What to Do If You’re Not Tracking Hours and Are an ALE
If your company is an Applicable Large Employer (ALE) under the Affordable Care Act (ACA), tracking employee hours is not just a good practice—it’s a regulatory necessity. But what happens if you’re not tracking hours? The consequences can be costly, confusing, and complex. Fortunately, with the right guidance and tools, you can get back on track quickly and stay compliant.
In this post, we’ll explore why tracking hours is critical for ALEs, what risks you face without it, and how ACA-Track can simplify the entire process, ensuring you remain confident and compliant with the law.
Understanding Your Status as an ALE
First, a quick refresher: An ALE is any employer with 50 or more full-time equivalent (FTE) employees, including both full-time and part-time workers whose combined hours meet that threshold. The ACA requires ALEs to offer affordable health coverage that provides minimum value to their full-time employees or risk significant penalties.
Full-time is defined as working 30 hours or more per week on average, or 130 hours per month. Therefore, tracking actual hours worked by part-time and variable-hour employees is essential to determine if they cross that threshold and require an offer of coverage.
Why Tracking Hours Matters
Compliance With ACA Employer Mandates
If you don’t track hours, you can’t accurately determine which employees are full-time under ACA guidelines. This failure means you could be unintentionally violating Section 4980H of the Internal Revenue Code, which governs the employer shared responsibility provisions.
Avoiding Penalties and IRS Letters
Failing to track hours can lead to penalties, including:
-
Employer Shared Responsibility Payment: If you fail to offer coverage to eligible employees, you might owe up to $2,000 per full-time employee per year.
-
IRS Penalty Letters (Form 226-J): The IRS sends these letters when it identifies non-compliance, giving detailed penalty calculations and demanding timely responses.
Protecting Your Business and Employees
Without accurate tracking, your company risks employees applying for Marketplace subsidies, which triggers penalty exposure. Proper documentation is your strongest defense if an employee claims they should have been offered coverage.
What To Do If You’re Not Tracking Hours Now
Step: Recognize the Risk
Understand that not tracking hours puts your organization at risk of fines, penalties, and compliance headaches.
Step: Start Tracking Immediately
Implement a system that captures actual hours worked for 100% of your workforce, including variable-hour, part-time, and full-time employees.
Step: Choose the Right Technology Partner — Like ACA-Track
Manually tracking hours across multiple systems is complicated and error-prone. ACA-Track offers a comprehensive, user-friendly, and fully integrated solution that simplifies tracking and reporting.
How ACA-Track Can Help You
Complete Hour Tracking & Data Integration
ACA-Track collects actual hours worked from all employee types and multiple data sources: timekeeping systems, manual timesheets, automated clocks, mobile entries, and payroll systems. It seamlessly integrates with your existing payroll or HRIS platforms, eliminating double work and errors.
Monitoring Employee Eligibility in Real-Time
ACA-Track monitors employee eligibility thresholds, sending advance alerts when employees approach full-time status so you can proactively manage offers of coverage.
Accurate, Timely Reporting
ACA-Track electronically prepares and files your 1094-C and 1095-C federal and state reports with the IRS, including monthly line code audits to catch errors early.
Fix Errors & Stay Audit-Ready
Mistakes in ACA reporting can lead to costly penalties. ACA-Track helps identify and correct reporting errors, while maintaining all ACA compliance data securely in one place for easy retrieval during IRS audits or state exchange requests.
Dedicated Support
With ACA-Track, you get a dedicated Client Success Advisor who understands your unique business needs, ensuring compliance is as simple and stress-free as possible.
Why ACA-Track Is the Trusted Choice for ALEs
-
Customizable Dashboard: View and arrange the most relevant compliance data for your business at a glance.
-
Snapshot Summary: Preserve historical employee ACA data and payroll info as it was at any point in time.
-
Powerful Data Tools: Filter, group, and export data easily with color-coded warnings for quick error detection.
-
Flexible Configuration: Adjust measurement and stability periods, hours thresholds, waiver codes, and more to fit your company’s policies.
-
Security: ACA-Track’s cloud-based platform is SOC 2 Type 2 compliant and ensures all employee data is encrypted and transmitted securely.
Next Steps for ALEs Not Currently Tracking Hours
-
Assess your current tracking processes. Are you tracking all employees’ hours consistently and accurately?
-
Engage your HR, Payroll, Finance, and Benefits teams. ACA compliance is a cross-departmental effort.
-
Contact ACA-Track to learn how their solution can take the burden off your shoulders, mitigate risk, and keep you compliant.
For employers who want to be confident in ACA compliance and eliminate guesswork, ACA-Track offers a proven, secure, and comprehensive solution.
Final Thoughts
If you’re an ALE not currently tracking hours, don’t delay. The risks and penalties are real, and the administrative complexity only grows each year. Start tracking today and partner with a trusted expert like ACA-Track to protect your business and your employees.
Be confident with a proven ACA compliance solution. Visit ACA-Track now to get started.
If you have any questions about ACA compliance, feel free to ask — I’m here to help!
