2027 ACA Pay-or-Play Checklist: Key Steps for Employers

Under the Affordable Care Act (ACA), applicable large employers (ALEs) must offer affordable, minimum-value health coverage to full-time employees and their dependents or risk IRS penalties. Small employers that are not ALEs are not subject to these pay-or-play rules.

An ALE may face a pay-or-play penalty if at least one full-time employee receives a premium tax credit for Exchange coverage and the ALE:

• Failed to offer coverage to at least 95% of full-time employees and their dependents;
• Excluded the full-time employee receiving the credit; or
• Offered coverage that was unaffordable or lacked minimum value.

The pay-or-play rules carry two potential penalties for employers: 4980H(a) and 4980H(b).

To help employers prepare for 2027, the checklist covers six key areas:

• Determining ALE status
• Identifying full-time employees
• Offering health plan coverage
• Reviewing coverage affordability
• Confirming minimum value
• Maintaining complete documentation

Stay ahead of 2027 ACA requirements, download the pay-or-play compliance checklist for essential employer action steps.