According to the Employer’s Shared Responsibility provision of the Affordable Care Act, employers that have an average of at least 50 full-time or full-time equivalent employees must offer those employees and their children health coverage that is considered to be affordable.
In the absence of providing full-time employees with affordable health coverage, qualifying employers must make payments to the IRS if any qualifying employees buy health insurance through the Health Insurance Marketplace and receive a premium tax credit as a result of their employer failing to offer coverage that meets the minimum standards.
Of course the crux of these standards turns on how affordable is defined and where the line is drawn between coverage that meets that definition and coverage that falls short.
Currently, as of plan year 2023, the threshold for coverage that qualifies as affordable is set at coverage that requires a maximum employee contribution equivalent to no more than 9.12% of the employee’s income. As of plan year 2024, however, that income-to-affordability threshold will be decreased to 8.39%.
You can read more about the Employer Shared Responsibility Provision here.
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