469 / What is the employer mandate imposed by the ACA?
Employers with at least 50 full-time equivalent employees (“FTEs”) must offer insurance meeting specified requirements or pay a $2,000 per full-time worker penalty after its first 30 employees if any of its full-time employees receive a federal premium subsidy through a state health insurance exchange (which would occur because the employee was not being offered sufficient coverage through the employer).1
A different penalty applies for employers of at least 50 full-time equivalent employees that offer some insurance coverage but not enough to meet federal requirements. In this case, the penalty is $3,000 per full-time employee who gets government assistance and buys coverage in an exchange, subject to a maximum penalty of $2,000 times the number of full-time employees in excess of the first 30.2
The amounts are adjusted annually for inflation each year. The penalties under IRC Section 4980H(a) were decreased to $2,900 in 2025 ($2,970 for 2024). The penalties under IRC Section 4980H(b) were decreased to $4,350 in 2025 ($4,460 for 2024).