The ACA Employer Mandate

Penalty for non-compliance

The Affordable Care Act requires that everyone have qualified insurance coverage through an employer policy or an individual policy.  Accordingly, if your employees don’t have insurance coverage, a penalty will apply.

How much is the penalty?

If you have 50 or more full-time equivalent employees, and do not offer health coverage to them, you may owe a tax penalty.  Accordingly, this applies when at least one employee receives a premium tax credit/cost sharing subsidy in the exchange. Thus, when this occurs, a penalty of $2,000 annually multiplied by the number of full-time employees applies (excluding the first 30 employees).  Moreover, the penalty is increased each year by the growth in insurance premiums.

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