HIPSON INVESTMENTS

Resources · ACA Compliance · ABA Clinics · 7 min read · Updated Aug 2026

The 50-employee line you crossed without noticing.

JB Justin Boulet
Principal · CFO & Payroll Services · works with a dozen Texas ABA clinics

Nobody decides to break the Affordable Care Act. What happens instead is quieter: a clinic grows from 30 people to 70, most of them hourly therapists whose schedules move with client authorizations, and everyone keeps saying the sentence I hear every month — "we only have about 35 full-time people." Under the ACA, that sentence and your real headcount can be forty employees apart.

50FT + FTE threshold that makes you an Applicable Large EmployerIRS §4980H, prior-year average
÷120Monthly part-time hours become full-time equivalentsIRS FTE formula
6 yrsStatute of limitations on §4980H penaltiesIRS enforcement guidance
$680Per employee for the filings you did not know you owed2026 form penalties, both copies

The math that catches clinics

The IRS does not count people. It counts hours. Every employee at 30+ hours a week is full-time; everyone else's hours go into a pool, and each 120 hours of that pool per month is one full-time equivalent. Take a real-shaped example: 38 full-time staff plus 40 part-time therapists averaging 20 hours a week. Those therapists contribute 40 × 86.7 monthly hours = 3,468 hours — about 29 equivalents. Your "35-person" clinic is a 67-FTE Applicable Large Employer, with offer obligations, affordability tests and 1094-C/1095-C filings you have never made.

38 full-time staff30+ hrs/week — count as-is 40 part-time therapists~20 hrs/wk → 3,468 hrs/month 3,468 ÷ 120 = 28.9 FTEThe hours pool becomes equivalents 38 + 28.9 = 66.9An ALE — 17 employees past the line "We only have about 35 full-time people" and "we are an Applicable Large Employer" can both be true.
Fig. 01 — how a "35-person" clinic crosses the 50-FTE line

Why payroll didn't warn you

Because for variable-hour staff, the law doesn't even let you eyeball it. Full-time status must be established with a look-back measurement period — track each variable-hour employee over 3 to 12 months, then lock their status for a stability period. Most payroll platforms will run this if someone configures it; almost nobody configures it. I have explained look-back measurement to payroll professionals with fifteen years in the industry, and to the CPA of one of our own 300-life clients — a good accountant who was candid that this is simply not what he was hired for.

It's only a problem when you get caught — and the IRS catches it from your own W-2 data, two or three years later, with interest.

If you run an ABA clinic, read this twice

ABA clinics are the perfect storm: fast growth, therapist hours that swing with authorizations, thin administrative staff, and reimbursement pressure that makes a six-figure penalty existential. It is also the industry we know best — a dozen Texas clinics are our clients, and our practice has stood inside the autism community for years, on the family side and the employer side. The fix is not dramatic: count correctly once, set up the measurement calendar, bring the filings current, and the problem stays fixed.

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Sources & notes: IRS Employer Shared Responsibility provisions and FTE calculation method; IRS Instructions for Forms 1094-C/1095-C; look-back measurement method regulations; 2026 information-return penalty schedule. The 38/40 example is illustrative. Educational only — not tax or legal advice.