ACA Compliance Checker

Determine your ALE status, check affordability requirements, and estimate potential penalties under the Affordable Care Act

Free • No Login Required • 2026 Rules • IRS Safe Harbor Methods

Step 1 — Workforce Count

Enter your employee counts. The ACA uses Full-Time Equivalent (FTE) calculations to determine if you're an Applicable Large Employer (ALE) with 50+ FTEs.

Total Full-Time Employees (30+ hrs/week) ?Under the ACA, a full-time employee works an average of 30+ hours per week or 130+ hours per month. All full-time employees count as 1 FTE each.Source: ACA Section 4980H(c)(4); IRS Reg. 54.4980H-1(a)(21)

Total Part-Time Employees ?Employees who work fewer than 30 hours per week. Their hours are combined and divided by 120 to determine additional FTEs for ALE status calculation.Source: ACA Section 4980H(c)(2)(E); IRS Final Rule 79 FR 8544

Average Weekly Hours for Part-Time 20 hrs ?The average number of hours your part-time employees work per week. This is used to calculate the FTE equivalent. Monthly hours = weekly hours x 4.33.Source: IRS Reg. 54.4980H-2(b)

Seasonal Employees? ?If you exceed 50 FTEs for 120 days or fewer AND those extra employees are seasonal workers, you may not be an ALE. Seasonal workers are those who work 6 months or fewer in roles tied to a season.Source: ACA Section 4980H(c)(2)(B); IRS Notice 2014-49

Step 2 — Current Benefits

Tell us about your current health coverage offering. This determines which compliance tests apply and potential penalty exposure.

Do You Offer Health Coverage? ?ALEs must offer Minimum Essential Coverage (MEC) to at least 95% of full-time employees (and dependents) to avoid the 4980H(a) penalty.Source: ACA Section 4980H(a); IRS Reg. 54.4980H-4

Does Plan Meet Minimum Essential Coverage (MEC)? ?MEC is the threshold requirement under Section 5000A. Most employer-sponsored group health plans meet MEC. Self-insured plans and fully-insured major medical plans qualify.Source: IRC Section 5000A(f); IRS Notice 2013-54

Does Plan Meet Minimum Value (60% AV)? ?A plan provides Minimum Value if it covers at least 60% of the total allowed cost of benefits. Use the HHS MV Calculator or safe harbor methods to verify. Most major medical plans meet this.Source: ACA Section 36B(c)(2)(C)(ii); IRS/HHS MV Calculator

Employee Contribution for Self-Only ($/month) ?The monthly amount the lowest-cost self-only option charges the employee. This is used for the affordability test. Under the W-2 safe harbor, the employee's contribution must not exceed 9.02% of W-2 Box 1 wages.Source: IRS Notice 2024-35; Rev. Proc. 2024-35 (9.02% for 2025 plan years)

Lowest-Paid Full-Time Employee Annual Salary ?Used for the W-2 safe harbor affordability test. The employee's required contribution for self-only coverage must not exceed 9.02% of their W-2 Box 1 wages. This is the most commonly used safe harbor.Source: IRS Reg. 54.4980H-5(e)(2); IRS Notice 2024-35

ACA Compliance Results

Full-Time Equivalent (FTE) Count

ACA Section 4980H(c)(2)(E)

Applicable Large Employer Status

ACA Section 4980H(c)(2)

What You Should Do

FTE Calculation: Full-time employees (30+ hrs/week) count as 1 FTE each. Part-time employee FTEs are calculated by dividing total monthly part-time hours by 120. Formula: FTEs = Full-Time Count + (Part-Time Count x Avg Weekly Hours x 4.33) / 120.

ALE Determination: An employer is an ALE if it had an average of 50+ FTEs during the prior calendar year. The seasonal worker exception applies if you exceed 50 FTEs for 120 days or fewer and the excess is from seasonal workers.

Affordability Test: Using the W-2 Box 1 safe harbor method, employee self-only coverage is affordable if the required monthly contribution does not exceed 9.02% of the employee's W-2 Box 1 wages divided by 12. The 9.02% threshold is indexed annually (IRS Notice 2024-35 / Rev. Proc. 2024-35).

Minimum Value: A plan provides minimum value if it covers at least 60% of the total allowed cost of benefits expected to be incurred. Verified using the HHS MV Calculator or plan design safe harbors.

Penalty A — 4980H(a): $2,970 per year per full-time employee (minus the first 30) if the employer fails to offer MEC to at least 95% of full-time employees. Triggered only when at least one full-time employee receives a premium tax credit.

Penalty B — 4980H(b): $4,460 per year for each full-time employee who receives a premium tax credit because the coverage offered was not affordable or did not meet minimum value. Capped at the Penalty A amount.

Sources: ACA Section 4980H, IRS Notice 2024-35, IRS Rev. Proc. 2024-35, IRS Final Regulations (79 FR 8544), DOL ACA FAQ, HHS MV Calculator methodology.

Built on Federal ACA Rules — Not Guesswork

Current IRS penalty amounts, affordability thresholds, and compliance standards for the 2025/2026 plan year.

⚖️

ACA Section 4980H

Employer shared responsibility provisions and penalty calculations

📊

IRS Notice 2024-35

Indexed affordability percentage (9.02%) for the current plan year

💰

Rev. Proc. 2024-35

Adjusted penalty amounts: $2,970 (a) and $4,460 (b) per employee

📄

DOL ACA Guidance

Employer reporting requirements and compliance FAQ

Need Help Getting Compliant?

A benefits advisor can review your specific situation and help you avoid costly ACA penalties.

Common Questions

What happens if I do not comply with the ACA?

If you are an Applicable Large Employer (50+ FTEs) and fail to offer qualifying coverage, you face penalties of several thousand dollars per full-time employee per year. The IRS sends Letter 226-J to notify employers of proposed penalties. Responding correctly and promptly is critical.

How do I know if I'm an Applicable Large Employer?

You count all full-time employees (30+ hours/week) plus the full-time equivalent of your part-time employees' hours. If you averaged 50 or more FTEs during the prior year, you are an ALE. This tool does that calculation for you.

What does 'affordable' mean under the ACA?

A plan is considered affordable if the employee's required contribution for self-only coverage does not exceed a set percentage of their income (adjusted annually by the IRS). There are three safe harbor methods employers can use to demonstrate affordability.

What This Means For You