8859 / How does an employer that has been in existence for less than one year determine whether it is subject to the ACA shared responsibility provisions?

In general, an employer’s status as an applicable large employer is determined based on the number of full-time equivalent employees it employed in the previous year (see Q 8858). For an employer that was not in existence during the previous year, determination of whether it is an applicable large employer and thus subject to the ACA shared responsibility provisions is based upon the number of employees that it reasonably expects that it will employ during the current year. The penalty provisions will apply only if the employer actually does employ an average of 50 or more full-time employees (and equivalents) during its first year of existence.¹ An employer was not in existence during the previous calendar year only if it was not in existence on any business day during that year.²