Tax Facts

8869 / If an employer with fewer than 50 full-time employees offers health coverage that is generally affordable and provides minimum value to employees, but for certain employees the coverage is not affordable and so those employees purchase health insurance through the market and receive premium tax credits, is that employer subject to the ACA shared responsibility provisions?

No. An employer with fewer than an average of 50 full-time employees on business days during the preceding calendar year is not subject to the shared responsibility provisions even if it offers health coverage that is not affordable to certain of its employees who, as a result, receive the premium tax credit.1



Further, for 2015, transition relief was available for employers with fewer than 100 full-time employees that offered coverage that was not affordable or did not provide minimum value. An employer was not subject to the shared responsibility provisions in 2015 (or, for non-calendar year plans, that portion of the plan year that fell within 2016) if the following conditions were satisfied:

  1. The employer employed, on average, at least 50 full-time employees but fewer than one-hundred full-time employees in 2014.

  2. The employer did not reduce its workforce or overall hours of employees’ service between February 9, 2014 and December 31, 2014, unless such reduction was made for bona fide business purposes.

  3. The employer did not eliminate or materially reduce any health coverage that it offered as of February 9, 2014, before December 31, 2015.

  4. The employer certified that it meets the eligibility requirements described above.2







1.  IRC 4980H(b). See also IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act, available at: http://www.irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act (last accessed September 28, 2024).

2.  Preamble to the Final Regulations, TD 9655, Section XV.D.6.

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