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. 

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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. 

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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. 

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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%.

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You can read more about the Employer Shared Responsibility Provision here.