Applicable Large Employers (ALEs) must understand ACA rules in 2025 to avoid costly penalties. Rules now include new thresholds and reporting requirements. Staying compliant remains critical.
What Are the “A” and “B” Penalties?
A‑Penalty (Section 4980H(a))
ALEs face this penalty if they don’t offer Minimum Essential Coverage (MEC) to at least 95% of full‑time employees and one receives a subsidy.
For 2025, the penalty totals $2,900 per full‑time employee (after the first 30).
Avoiding the ACA Large Employer A and B Penalties in 2025 – Enrollment First, Inc.
IRS Announces ACA Pay or Play Penalties | OneDigital
B‑Penalty (Section 4980H(b))
This penalty applies when coverage fails affordability or minimum value standards. If an employee receives a subsidy despite coverage, ALEs face $4,350 per employee in 2025.
IRS Decreases Employer Mandate Penalties For 2025
2025 ACA Updates: What’s New?
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Affordability Threshold dropped to 9.02% of household income for coverage cost.
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Penalty rates reduced slightly from 2024 to 2025, but enforcement becomes more rigorous.
SBMA Benefits+5Vitable Health+5Enrollment First, Inc.+5
How Employers Can Stay Compliant
1. Verify ALE Status
Ensure you are classified correctly based on the average of 50 full-time equivalents or more.
2. Offer MEC to 95%+ Full‑Time Employees
Or risk the A‑Penalty if a subsidized exchange participant exists.
3. Confirm Affordability & Minimum Value
Plans must meet IRS affordability safe harbors and cover at least 60% of plan costs.
4. File Accurate IRS Forms
Submit Forms 1094‑C and 1095‑C correctly and on time to avoid late-filing fines.
5. Monitor Plan Design Regularly
Adjust premiums or coverage annually to meet evolving affordability criteria.
Avoiding the ACA Large Employer A and B Penalties in 2025 – Enrollment First, Inc.
How to Avoid the ACA Shared Responsibility Penalty
Example Scenarios (2025)
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A‑Penalty Example: An employer with 70 full‑time employees who fails to offer MEC risks $116,000 penalty (40 × $2,900).
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B‑Penalty Example: Ten employees enroll in subsidized coverage due to unaffordable plans—penalty equals $43,500 (10 × $4,350)
.Avoiding the ACA Large Employer A and B Penalties in 2025 – Enrollment First, Inc.
Why Compliance Still Matters in 2025
Even though penalties slightly decreased, the IRS is expanding enforcement efforts—to penalize employers who fail to comply.
Noncompliance harms finances, reputation, and team morale.
Staying informed and proactive ensures you safeguard your organization and employees.
Get the Tools to Avoid ACA Penalties
To minimize risk:
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Access compliance-ready enrollment platforms
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Use affordability calculators and reporting checklists
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Engage expert compliance advisors when unsure
With the right tools, you can protect your clients and their workforces from costly ACA penalties.