ACA Employer Shared Responsibility Mandate


Summary

This practice note describes the shared responsibility rules for so-called applicable large employers (ALEs) implemented by the Patient Protection and Affordable Care Act (Pub. L. No. 111-148), as amended by the Health Care and Education Reconciliation Act (Pub. L. No. 111-152) (ACA). Although the ACA does not require businesses to provide health benefits to their workers, employers classified as ALEs—generally those with 50 or more full-time employees and full-time equivalent employees—may face excise tax penalties if they don't offer health coverage or don't offer coverage that meets certain minimum value and affordability standards. It is important for employee benefits practitioners and in-house counsel responsible for ACA compliance to understand when and how these rules apply so they can advise their clients that are or may be ALEs on the costs they potentially face and how to avoid them.