ACA Employer Responsibility Affordable Coverage Requirement
Companies are only required to offer at least one medical plan that meets the “affordability” requirement (at the employee-only coverage level). Regulatory guidance allows companies to calculate affordability based on the employee’s income, using one of three IRS safe harbors. The Safe Harbors are:

  • 9.5% of W-2 wages from previous year
  • 9.5% of Rate of Pay (hourly rate of pay × 130 hours; excludes tipped employees and employees paid solely on a commission basis)
  • 9.5% of the Federal Poverty Level

What are the tax penalties if a large employer does not comply with the ACA Employer Responsibility Requirements? (Now effective in 2015 or 2016, based on employer’s FTE count)
If the employer does not offer minimum essential coverage

  • $2,000 per each full-time employee if one full-time employee obtains Marketplace coverage using a subsidy
  • Waived for first 30 full-time employees

If the employer does offer minimum essential coverage, but coverage does not meet minimum value and affordability requirement, and at least one full-time employee obtains Marketplace coverage using a subsidy

  • Penalty is $3,000 for every full-time employee that purchases insurance coverage through the Marketplace using a subsidy