Applicable Large Employer (ALE) Considerations in the Context of an M&A Transaction

Summary

While the Affordable Care Act (ACA) is over ten years old, many questions still linger in the weeds for employers navigating the complex regulatory environment. One area where there is still a lot of uncertainly involves mergers and acquisitions. The IRS requested comments on myriad merger issues related to the ACA back in 2014 when it released Notice 2014-49. However, further guidance has not been issued -- resulting in uncertainty. One question that remains unanswered is what happens when a non-applicable large employer (non-ALE) acquires 100% of the stock in an applicable large employer (ALE) in the middle of the year. The remainder of this article explores this question.