ACA employer penalties (Employer Shared Responsibility Payment) apply to Applicable Large Employers (ALEs) with 50+ full-time equivalent employees failing to offer affordable, minimum-value coverage. Penalties are rising annually, with 2026 failure-to-furnish penalties reaching $680 per form, and 2025 affordability thresholds set at 9.02%. 

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Key ACA Penalty Details (2025–2026):

ALE Definition: Employers with 50 or more full-time employees (including full-time equivalents).

Penalty A (No Offer of Coverage): Assessed if an ALE does not offer coverage to at least 95% of full-time employees. For 2025, this penalty is $2,900 per year ($241.67 monthly) per employee, excluding the first 30 employees.

Penalty B (Inadequate Coverage): Assessed if coverage is offered but is unaffordable or does not meet minimum value. For 2025, this is $4,350 per year ($362.50 monthly) for each employee receiving a premium tax credit.

Reporting Penalties: Failing to file accurate 1095-C/1094-C forms with the IRS and provide them to employees can lead to penalties of $680 per return.

Affordability Threshold: For 2025, employer coverage is considered affordable if the employee's contribution for self-only coverage does not exceed 9.02% of their household income. 

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Common Causes for Penalties:

Errors in tracking employee eligibility (specifically, improperly identifying full-time employees).

Inaccurate or missing reporting on Forms 1094-C and 1095-C.

Incorrectly calculating affordability safe harbors.

Missing deadlines for providing employee statements. 

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Employers should monitor for IRS penalty notices, which are often sent years after the reporting year