Affordable Care Act tax provisions for employers

The Affordable Care Act, or health care law, contains benefits and responsibilities for employers. The size and structure of your workforce determines what applies to you. An employer’s size is determined by the number of its full-time employees, including full-time equivalents. 

For help with determining the size of  your workforce each year, see our page on  Determining if an Employer is an Applicable Large Employer.

 

Small Employers

Small employers, generally those with fewer than 50 full-time employees, may be eligible for credits and other benefits.

 

Large Employers

An applicable large employer, generally those with 50 or more full-time employees, including full-time equivalents.

If you have no employees, the information in the section below does not apply to you. However, other provisions, such as the insurance provider fee, or the branded prescription drug fee, may affect your organization. For a list of ACA tax provisions, visit the Affordable Care Act Tax Provisions page.

Why does the size of an employer’s workforce matter?

  • If you have fewer than 25 full-time employees, including full-time equivalent employees, you may be eligible for a Small Business Health Care Tax Credit to help cover the cost of providing coverage.
  • Generally, employers with 50 or fewer employees may be eligible to buy coverage through the Small Business Health Options Program or (SHOP Marketplace). Learn more at HealthCare.gov.
  • If you have 50 or more full-time employees, including full-time equivalent employees, you are an applicable full-time employer and need to issue statements to employees and file an annual information return reporting whether and what health insurance you offered employees. ALEs are subject to the employer shared responsibility provisions. 
  • Some states allow employers with up to 100 employees to buy coverage through the Small Business Health Options Program, or SHOP Marketplace.
  • Regardless of size, all employers that provide self-insured health coverage to employees must file an annual return reporting certain information for each covered employee and provide the same information to covered individuals.

Certain affiliated employers with common ownership or employers that are part of a controlled group are considered part of an aggregated group. In this case, you must aggregate, or combine, your employees to determine your workforce size. Learn more on the page for Determining if an Employer is an Applicable Large Employer. 

Applicable large employers can find resources and the latest news at the Applicable Large Employer Information Center.

 

More information