Employer Shared Responsibility Payment

The Affordable Care Act requires certain employers with at least 50 full-time employees (or equivalents) to offer health insurance coverage to its full-time employees and their dependents.

The health insurance needs to meet certain minimum standards set by the Affordable Care Act.

If the employer fails to do this, they will be assessed a tax penalty called the Employer Shared Responsibility Payment (ESRP).

A maximum yearly penalty of $2,880 (for 2023) per full-time employee (minus up to 30) will be incurred if the employer fails to offer minimum essential coverage to 95% of its full-time employees and their dependents.

This increases in 2024 to $2,970 per full-time employee.

♦ The penalty can increase significantly if any employee receives subsidized coverage through a public exchange because the employer offered coverage that is not "affordable" or lacks "minimum value."

The penalty being calculated on a monthly basis.