Under the Affordable Care Act, what is the penalty for a large employer that does NOT provide health insurance?

The correct answer reflects the penalty structure established by the Affordable Care Act (ACA) for large employers—those with 50 or more full-time employees. If a large employer fails to provide affordable health insurance coverage that meets minimum essential coverage standards, they may be subject to a penalty. This penalty is calculated based on the number of full-time employees beyond a threshold of 30.

For every full-time employee over the 30-employee threshold, the employer faces a penalty on a per-month basis. This means that if a large employer has, say, 100 full-time employees, they would subtract 30 from that total, resulting in 70 employees that contribute to the penalty calculation.

Understanding this structure is crucial for employers in evaluating their responsibilities under the ACA and anticipating potential costs associated with non-compliance.