Definition
A comprehensive federal health care reform law enacted in 2010 that expanded health insurance coverage, established the Health Insurance Marketplace, and imposed employer mandates requiring applicable large employers to offer affordable health coverage to full-time employees.
UK Context
Best Practices
- Track employee hours monthly to accurately identify full-time employees under the 30-hour ACA threshold
- Use one of the three IRS safe harbours to demonstrate coverage affordability
- File Forms 1094-C and 1095-C accurately and on time to avoid reporting penalties
- Review coverage annually to ensure plans meet minimum value requirements (covering at least 60% of expected costs)
Frequently Asked Questions
Which employers are subject to the ACA employer mandate?
Applicable large employers (ALEs) with 50 or more full-time equivalent employees in the prior year must offer affordable, minimum-value health coverage to substantially all full-time employees. Full-time is defined as 30+ hours per week under the ACA.
What are the penalties for not offering ACA-compliant coverage?
If an ALE fails to offer coverage to substantially all full-time employees and any employee receives a Marketplace premium tax credit, the penalty is approximately $2,970 per full-time employee per year (2024, minus the first 30 employees). If coverage is offered but is not affordable or lacks minimum value, the penalty is approximately $4,460 per affected employee.
What is the ACA look-back measurement method?
It is a method that allows employers to measure a variable-hour employee's hours over a standard measurement period (6-12 months) to determine if they qualify as full-time. If they average 30+ hours, they must be offered coverage during the subsequent stability period.