Step 1: Assign the appropriate ACA Exempt Status to each of your employees:

1. From the Payroll Setup menu, select Employees.
2. On the ACA Coverage tab, select the appropriate ACA exempt status for each employee.
3. If you need to change the employee ACA exempt status for certain months, click Employee/Dependents Detail top open the Compliance Details window.
   1. Specify the correct Year, then select the appropriate ACA Exemption Status for each month of the year.
   2. Click Save.
4. Complete steps B and C for each employee.

Step 2: Indicate the Pay IDs to be included in calculating hours for Affordable Care Act reporting:

1. From the Payroll Setup menu, select Pays.
2. Click List and select a Pay ID that should be included in Affordable Care Act hourly calculation totals.
3. Select the check box Include in ACA hours.
4. Click Save.
5. Repeat steps B through D for each Pay ID that you want included in Affordable Care Act hourly calculation totals.

Step 3: Use the ACA Compliance task to calculate the number of Full-time (FT) and Full-time Equivalent (FTE) employees:

1. From the Payroll Tasks menu, select ACA Compliance.
2. Select the appropriate year. Select or clear the check box Include Terminated Employees, as appropriate.
3. The Employee Hour Allocation table includes a row for each employee, with columns for each month showing hours worked. The FTE Count and FT Count at the bottom are used to determine if you qualify as an Applicable Large Employer (ALE). ALEs are subject to the employer shared responsibility provisions and the employer information reporting provisions under the Affordable Care Act.
4. • For each month that an employee was designated with the ACA Exemption Status of Full-Time (in Step 1, above), the hours cell will be prefilled with 130, and the cell is unavailable for editing.
   • For each month that an employee was designated with the ACA Exemption Status of Non-exempt (in Step 1, above), the hours cell is available for editing.
   • Enter the hours worked for each month for each Non-exempt employee.
     Note: To help you determine the hours worked for employees, see article 54349 “Is there a report to show Affordable Care Act applicable hours by month?” below.
5. As you enter hours by month for employees, notice that the Monthly totals at the bottom of the window are updated, as are the FT Count and the FTE Count.
   Note: FT Count = Number of employees with ACA Exemption Status of Full-time, plus the number of employees working 130 or more hours in the month. FT Count is reported on Part III in column b of the Federal 1094-C form.
   Note: FTE Count = The FT Count plus the total number of Non-exempt employee hours divided by 120. For example, if you have 2 part time Non-exempt employees who each work 60 hours in a month, they will equal one Full-time Equivalent (FTE) employee.
6. If you need to modify the compliance details for an employee, click the ellipsis button at the end of the row (...) in this Employee Hour Allocation table.
   Note: You can update the hours worked in the Employees Hour Allocation table as often as you prefer—either at the end of each month, or just once a year.