Employer Shared Responsibility Penalty Calculator

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Applicable Large Employers (employers who, in general, have 50 or more full-time or full-time-equivalent (FTE) employees) may be penalized if they do not offer minimum essential coverage to their employees. More details about the ESR provisions are available here.

The enforcement of the ESR provisions takes effect on January 1, 2015. Applicable Large Employers with 50-99 full-time employees may qualify for transition relief from potential penalties but are still required to file the informational returns 1094-C and 1095-C with the IRS . Employers should track employee hours now to prepare. Use the calculator below to determine your potential ESR penalties.

Number of Full-Time Employees

Total Hours Per Month All Part-Time Employees Work (cap at 120 hours per month)

(Full-time employees work 30 hours or more per week on monthly average.)

The calculator determines the number of full time equivalents (total part-time hours per month, capped at 120 hours per month, divided by 120 [fulltime definition under the law]), which is added to the number of full-time employees to determine whether an employer meets the 50-employee fee threshold. Fees are assessed based on actual full-time employees, not full-time employee equivalents.

Number of Full-Time Employee Equivalents1

1 No fee is paid on part-time employees or full-time employee equivalents.

Results:

Exempt

The employer does not have enough full-time or full-time equivalent employees to be subject to the ESR mandates (50 employees are required). This calculation is done on a monthly basis. The employer's status can change based on number of employees and hours worked by part-time employees.

Learn more about our health coverage options:

Scenario #1

If an Applicable Large Employer does not offer health coverage to full-time employees and at least one full-time employee receives a premium tax credit2, the employer's annual penalty owed to the federal government will be 3.

Scenario #2

If the employer does provide qualified health coverage to full-time employees and one or more full-time employees receives a premium tax credit4, the employer's penalty for each employee receiving a premium tax credit will be $3,0004. The penalty cannot exceed the payment for not having offered health insurance from Scenario 1 (number of full-time employees minus the first 30 x $2,000).

Possible penalties based on providing coverage and having full-time employees receive premium tax credits for health coverage:

# of Employees Receiving Premium Tax Credit
% of Workforce Receiving Premium Tax Credit
Penalty Amount

2If total employee cost exceeds 9.5% of an employee's income, the employee is eligible for premium tax credits in the new health insurance marketplace in that state.

3The first 30 full-time employees are exempt from the mandate penalty.

4The penalty amount is the lesser of the actual amount or $2,000 multiplied by all full-time employees, minus the first 30 full-time employees.

This calculator is designed to be general in nature and is not an official representation of your specific situation. Please consult with your tax advisor to determine any potential penalty.

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