ACA Penalty Calculator
The Affordable Care Act imposes steep penalties on businesses with 50 or more full-time employees that do not offer compliant health coverage. Penalties can exceed $200,000 per year for a mid-size business. Check your exposure in 30 seconds.
What is my ACA penalty exposure?
The Affordable Care Act imposes steep penalties on businesses with 50 or more full-time employees that do not offer compliant health coverage. Here is what drives your exposure and how to stay protected.
ACA Threshold
Businesses with 50 or more full-time equivalent employees are subject to the employer shared responsibility provisions. Below 50, you are not subject to penalties.
Coverage Requirement
You must offer coverage to at least 95 percent of full-time employees and their dependents, or face the 4980H(a) penalty.
Affordability
Coverage is affordable if the employee premium does not exceed 9.5 percent of household income. Unaffordable coverage triggers the 4980H(b) penalty.
Minimum Value
Your plan must cover at least 60 percent of expected medical costs and include substantial inpatient and physician services.
Penalties
The 4980H(a) penalty runs $2,900 per full-time employee in 2025. The 4980H(b) penalty runs $4,350 per employee who gets subsidized marketplace coverage.
Benefits
A PEO gives you access to compliant, affordable group health plans at large-employer rates, which satisfies ACA requirements without the cost of buying on your own.
Payroll
ACA reporting depends on accurate payroll and hours tracking. PEOs handle 1095-C reporting and affordability testing for you.
Compliance
ACA mistakes are expensive and the IRS enforces them years later. Expert compliance support protects you from retroactive penalties.
Your penalty risk will appear here
Enter your full-time employee count and coverage status to see your estimated ACA employer shared responsibility penalty exposure.
How this works
This calculator uses 2025 IRS penalty amounts. The 4980H(a) penalty is $2900 per full-time employee (minus the first 30) when coverage is not offered to at least 95 percent of full-time employees. The 4980H(b) penalty is $4350 per employee who receives a premium tax credit on the marketplace because your coverage is unaffordable or lacks minimum value. Coverage is considered affordable if the employee's premium does not exceed 9.5 percent of their household income. This tool provides a general estimate, not legal or tax advice. Consult a benefits professional for your specific situation.