One of the most common questions we hear from Florida business owners is: "Do I have to offer health insurance?" The short answer is — it depends on how many full-time equivalent employees you have. The ACA's Employer Shared Responsibility provision (the "employer mandate") only applies to businesses with 50 or more FTEs. Under that number, you're not legally required to offer coverage — though there are plenty of good business reasons to do so anyway.
If you're near the 50-employee mark, this becomes a more urgent question. The IRS determines ALE (Applicable Large Employer) status based on the prior calendar year's average monthly FTE count — and part-time workers are included in the calculation, which surprises many business owners who think their part-timers don't count.
How FTEs Are Counted
Here's the simplified version of the FTE calculation:
- Full-time employees (30+ hours/week or 130+ hours/month) each count as 1.0 FTE
- Part-time employees are aggregated: add up their monthly hours and divide by 120 to get the part-time FTE contribution
- Seasonal workers count unless the workforce exceeded 50 FTEs for fewer than 120 days and the excess was entirely seasonal
- Common ownership rule: if you own multiple businesses under common control, employees across all entities are aggregated
The result is averaged across all 12 months of the prior year. If your average was 50 or more FTEs, you are an ALE for the following calendar year.
What Happens If You're an ALE and Don't Offer Coverage
If your Florida business crosses the 50-FTE threshold and doesn't offer qualifying coverage, there are two types of penalties:
- "A" penalty (4980H(a)): Failure to offer minimum essential coverage to 95% of full-time employees. About $2,900/year per full-time employee (minus the first 30) when any employee gets a marketplace subsidy
- "B" penalty (4980H(b)): Coverage offered but not affordable or not minimum value. About $4,350/year per employee who receives a marketplace subsidy
The penalties are meaningful but not automatic — they're triggered when at least one full-time employee receives a premium tax credit on the ACA marketplace. That's actually a fairly common scenario in Florida, given the state's large uninsured population and active marketplace enrollment.
Planning tip: If you're at 42–48 FTEs and growing, talk to us before year end. The decision to offer coverage before crossing the threshold — rather than rushing to comply after — is almost always the better outcome for your employees and your business.