This is known as the employer "shared responsibility" provision. However, in 2015, employers with between 50 and 100 FTE employees were eligible for transition relief if certain criteria were met. Employer Shared Responsibility Determinations

		Applies to All Employers

The ACA employer shared responsibility provisions apply to all common law employers, including government entities (such as federal, state, local, or Indian tribal government entities) and nonprofit organizations that are exempt from federal income taxes. However, it does impose penalties on certain firms with at least 50 FTE employees if one or more of their full-time employees obtains a premium tax credit through the newly established health insurance exchanges. As shown in Figure 1 , determining the potential exposure to the employer penalty is a multi-stage process. This calculation determines only whether an employer is considered large for purposes of potentially being subject to a penalty. Owners or part-owners in multiple businesses must follow Internal Revenue Service (IRS) aggregation rules. Large Employers Determined to Not Offer Health Coverage

A large employer that does not offer health coverage will be subject to the ACA employer penalty only if any of its full-time employees obtain coverage through an exchange and receive a premium tax credit. The ACA specified that working 30 hours or more per week is considered full-time. However, the statute did not specify what time period (i.e., monthly or annually) employers would use to determine if a worker is full-time. An employer can be subject to a penalty only during the stability period. Employers may opt to use an administrative period (between the measurement and stability periods) to determine which ongoing employees are eligible for coverage and to notify and enroll employees in health care plans. Determining Full-Time Worker Status for Seasonal Workers

When determining the number of full-time employees for purposes of applying the employer penalty, the final regulations allow employers to employ a look-back measurement period of up to 12 months for determining if seasonal employees are full-time employees. Health Insurance Coverage Requirements for Employer Plans

To fulfill the shared responsibility requirements, employers must provide health insurance coverage that is both affordable and adequate to full-time employees and their dependents. Affordable Coverage

Employer coverage is deemed affordable if the employee's portion of the self-only premium for the employer's lowest-cost health coverage plan does not exceed 9.66% of the employee's W-2 wages . Adequate Coverage (Minimum Value)

Under the ACA, a plan is considered to provide adequate coverage (also called minimum value) if the plan's actuarial value (i.e., share of the total allowed costs that the plan is expected to cover) is at least 60%. An employer was not treated as eliminating or materially reducing health coverage if any of these conditions were met:
It continued to offer each employee who was eligible for coverage an employer contribution toward the cost of employee-only coverage that either (1) was at least 95% of the dollar amount of the contribution toward such coverage that the employer was offering on February 9, 2014, or (2) was at least the same percentage of the cost of coverage that the employer was offering to contribute toward coverage on February 9, 2014; In the event of a change in benefits under the employee-only coverage offered, that coverage provided minimum value after the change; and It did not alter the terms of its group health plans to narrow or reduce the class or classes of employees (or the employees' dependents) to whom coverage under those plans was offered on February 9, 2014. Appendix A. Large employers must provide the following to the IRS:
a return including the name, address, and employer identification number; a certification as to whether the employer offers its full-time employees (and dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan; the length of any waiting period; months coverage was available; monthly premiums for the lowest-cost option; the employer plan's share of covered health care expenses; the number of full-time employees; the name, address, and tax identification number of each full-time employee; and information about the plan for which the employer pays the largest portion of the costs (and the amount for each enrollment category). This provision had been added by Section 1511 of the ACA. Appendix B.
The Affordable Care Act (ACA) creates shared responsibilities for both employers and individuals with regard to health insurance coverage. The ACA expands federal private health insurance market requirements and requires the creation of health insurance exchanges to provide individuals and small employers with access to insurance. This report examines the new employer responsibilities.
To ensure that employers continue to provide some degree of health coverage, the ACA includes a "shared responsibility" provision. This provision does not require that an employer offer employees health insurance; however, the ACA imposes penalties on a "large" employer if at least one of its full-time employees obtains a premium credit through the newly established exchange.
As of 2015, employers with at least 50 full-time equivalent (FTE) employees are subject to the shared responsibility provisions. However, in 2015 only, employers with between 50 and 100 FTE employees were eligible for transition relief if certain criteria were met.
The ACA sets out a multi-stage process for determining, first, which firms may be subject to the penalty (i.e., definition of large), and second, which workers within a firm would trigger the penalty. Complex calculations and multiple definitions of full-time work have led to confusion among policymakers and employers. This report discusses these definitions and the application to the employer penalty in greater detail.
The potential employer penalty applies to all common law employers, including government entities (such as federal, state, local, or Indian tribal government entities) and nonprofit organizations that are exempt from federal income taxes. If multiple businesses are owned by one individual or entity, employees in each of the franchises must be aggregated to determine the number of both FTEs and full-time employees.
The actual amount of the penalty varies depending on whether an employer currently offers insurance coverage and the number of full-time employees. Employers must provide both affordable and adequate health insurance coverage to avoid paying a penalty. Coverage is considered affordable if the employee's required contribution to the plan does not exceed 9.66% of the employee's household income for 2016. However, the Internal Revenue Service (IRS) allows employers to use the employee's W-2 income in lieu of household income for this calculation (because most employers do not readily have information on an employee's household income). A health plan is considered to provide adequate coverage if the plan's actuarial value (i.e., the share of the total allowed costs that the plan is expected to cover) is at least 60%.
The total penalty for any applicable large employer is based on its number of full-time employees. The ACA specified that working 30 hours or more per week is considered full-time. Employers have some flexibility to designate certain measurement or look-back periods (up to 12 months) during which they calculate whether a worker is full-time or not. Once an employee is determined to be full-time, there is an administrative period to enroll employees in a health plan, if necessary. If an employer penalty is levied under the ACA requirements, it applies only for the time period following the administrative period, which is called the stability period. An employer is not penalized if an employee enters the exchange and receives a premium credit during the measurement period.
Appendix A provides a list of employer reporting requirements. Appendix B includes a table of relevant legislation introduced in the 114th Congress.