ACA Compliance - Asset Deal

[beartd]

If a company sells substantially all of its assets to a buyer, but retains less than 50 FTEs for a short period of time to wrap up corporate affairs, are they still an ALE?

ALE is determined on prior year employee count. Seller will have less than 50 full time employees next year and will be terminating their health care plan as they will only be in operation for 6 months or less.

I don't see any transitional relief regarding ALE status in an asset deal. Any thoughts?

[GBurns]

Why would it matter?

Unless they are hoping to get a lower rate by changing their health insurance coverage, which is very very unlikely, I cannot see a reason to want to change anything. It seems too much trouble for no gain.

[beartd]

It would matter because if they were still an ALE and offered no health insurance they would be subject to both a and b penalties.

They actually have no option to offer health insurance as their stop loss has a renegotiation clause due to the large change in employees and wont re-insure them and they can't get fully insured plan as they have too much exposure due to M&A qualified beneficiaries.

They aren't changing they are eliminating their insurance as they can't get any insurance according to their broker.

[Flyboyjohn]

If they're a "big" ALE (100+) then they get an 80 FT exemption for "a" penalty calculation for all months of 2015.

At the point they stop offering coverage they'll have less than 80 FT so no "a" penalties for those months.

Since the "b" penalty can't exceed the "a" should be no problem?