ACA Requirements for Employers

If you have 50 or more full-time equivalent (FTE) employees, the ACA requires that you offer affordable coverage to at least 95% of your full-time employees,1 defined as those who work at least 30 hours a week. ( has a calculator to help you figure out how many FTE employees you have.) If you don't offer an affordable plan, you might be required to pay an assessment if at least one of your full-time employees gets a health insurance premium tax credit for buying coverage in the Health Insurance Marketplace for individuals. An affordable plan is defined as employee-only coverage at a cost to the employee of 9.69% or less of the employee’s household income.2

If you have fewer than 50 (FTE) employees, you are generally exempt from having to provide coverage. But if you decide to provide coverage, it has to comply with the ACA's requirements for small group plans, including the need to cover 10 essential health benefits with no annual or lifetime benefit caps.

These are what the ACA considers to be essential health benefits: hospitalization, prescription drug coverage, pregnancy and childbirth, emergency services, mental health and substance abuse services, dental and vision coverage for children,lab tests, preventive care and chronic disease management, and services to improve or maintain function for daily living, such as physical and occupational therapy.3

If you have 50  employees or fewer, you can cover them through the Small Business Health Options Program (SHOP), part of the Health Insurance Marketplaces. SHOP offers small employers the chance to obtain high-quality coverage and, by pooling risk and streamlining administration, reduce costs.

And if you offer coverage through SHOP, you might be eligible for the Small Business Health Care Tax Credit. The tax credit is for employers with fewer than 25 FTE employees who, on average, earn less than $50,000 a year. Another eligibility requirement is that your company pays for at least half of the cost of its employees' health insurance premiums.4

The ACA requires employers to provide employees with a “Summary of Benefits and Coverage" form explaining what their plan covers and how much it costs so employees can better understand their options. You could be penalized if you offer coverage but don't provide employees with this form.

You can't simply tell your employees to find their own plan and then reimburse them for what they spend on health insurance premiums. If you do, you might be hit with a $100-a-day—or $36,500 a year--excise tax per employee.

Regardless of the size of your company, if you provide minimum essential coverage to your employees, you must report to the IRS the name and taxpayer identification number “of the responsible individual (the person who may be the primary insured or a related person, such as a parent or spouse who submitted the application for coverage) for each covered individual.”You must also report the months for which the primary insured person was enrolled in your plan and entitled to receive benefits for at least one day.5

Get Pricing for group benefits

Find competitively priced plans to fit any budget

We’ll help you get the most from your employee benefits

Products and services

Explore the different types of group benefits we offer for employees.

Explore group insurance options

Learn about employee health benefits

Take a few minutes to read some helpful information as you consider offering insurance benefits to your employees.

Explore the basics

Wellness solutions

Engage your employees for a healthier, more productive workplace.

Get details