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Employer Shared Responsibility Provisions

Updated: Oct 8, 2022

What is Employer Shared Responsibility?

Certain employers (called applicable large employers or ALEs) must either offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employees (and their dependents), or potentially make an employer shared responsibility payment to the IRS. (

What qualifies as an 'applicable large employer' or ALE?

To be an ALE for a particular calendar year, an employer must have had an average of at least 50 full-time employees (including full-time-equivalent employees) during the preceding calendar year. (

Why does this matter?

Coverage is generally 'affordable' for plan years beginning in 2022 if an employee's required contribution for self-only coverage does not exceed 9.61% of his or her household income for the taxable year (decreased from 9.83% for 2021). For plan years beginning in 2023, this percentage significantly decreases to 9.12%. This is the most substantial decrease in this percentage since these rules were implemented, and is the lowest that this percentage has ever been set, at 0.38% below the statutory affordability percentage of 9.5%. As a result, many employers may have to significantly lower the amount they require employees to contribute for 2023 to meet the adjusted percentage.

For more information on employer shared responsibilities, visit


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