The Affordable Care Act — requires applicable large employers (50+ FTEs) to offer affordable health coverage or pay a penalty.
The Affordable Care Act (ACA), enacted in 2010, reshaped US health insurance. For employers, the most relevant provision is the Employer Shared Responsibility (ESR) mandate, which requires Applicable Large Employers (ALEs — those averaging 50 or more full-time equivalent employees in the prior calendar year) to offer minimum essential coverage that is affordable and provides minimum value to at least 95% of full-time employees, or face penalties under IRC Section 4980H.
Full-time, for ACA purposes, means an average of 30 or more hours per week. The 'affordability' threshold is set annually as a percentage of the employee's household income (8.39% for 2025). 'Minimum value' means the plan covers at least 60% of the average cost of medical services. Failing to offer coverage can trigger a 4980H(a) penalty (~$2,970 per FTE in 2025), and failing to offer affordable / minimum-value coverage triggers a 4980H(b) penalty (~$4,460 per FTE who receives a marketplace subsidy).
ALEs must report compliance using Forms 1094-C and 1095-C each January. Employees are also entitled to a Summary of Benefits and Coverage (SBC) at enrollment. Modern HRIS platforms track FTE counts in real time, calculate ACA affordability per employee, and prepare the annual filings.
As an ALE, we measure FTEs monthly, offer ACA-compliant coverage to all full-time staff, and file Forms 1094-C and 1095-C each January.
Peoplifi unifies HR, payroll, time tracking, and performance into one modern platform — so concepts like ACA stay handled, not stuck in spreadsheets.
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