ACA (Affordable Care Act)

What is the ACA (Affordable Care Act)

The Affordable Care Act (ACA) — also known as Obamacare — is a comprehensive U.S. healthcare reform law enacted in 2010. Designed to expand access to affordable health insurance, the ACA introduced new requirements for individuals, employers, and insurance providers alike. If you’re a business owner with employees, it’s more than a headline — it’s compliance you can’t ignore.

The ACA reshaped employer-sponsored healthcare with rules around who must offer coverage, what qualifies as “affordable,” and how penalties work for noncompliance. Staying compliant isn’t just about offering a plan — it’s about reporting the right data, to the right agencies, on time.

ACA employer mandate: what it means

Under the ACA’s Employer Shared Responsibility Provisions (sometimes called the employer mandate), businesses with 50 or more full-time employees (or equivalents) — known as Applicable Large Employers (ALEs) — must:

• Offer minimum essential coverage (MEC) to at least 95% of full-time employees (and their dependents)
• Ensure that coverage is affordable and meets minimum value standards
• File ACA-related tax forms with the IRS annually (typically Forms 1094-C and 1095-C)

Failing to do any of the above could result in IRS penalties — sometimes in the six-figure range.

Who needs to comply?

Your business may need to comply with ACA requirements if:

• You have 50+ full-time employees or full-time equivalents (FTEs), even across multiple locations
• You offer group health insurance and must report coverage
• You’re a staffing agency, franchise, or seasonal business with fluctuating headcount

Even if you’re not an ALE, ACA rules still matter — especially when it comes to classification, eligibility, and employee communications.

Related: Employee Classification

ACA key terms you need to know

Here’s a quick breakdown of some important ACA terms:

• Full-Time Employee: Works 30+ hours per week or 130+ hours per month
• FTE (Full-Time Equivalent): A calculation that combines part-time employees into full-time headcount for ACA purposes
• Minimum Essential Coverage (MEC): Basic coverage an employer must offer to meet the ACA mandate
• Affordability Threshold: The maximum percentage of an employee’s income that a plan can cost them — in 2025, it’s 8.39%
• Minimum Value: A plan must cover at least 60% of expected healthcare costs

Understanding these terms helps you avoid common ACA pitfalls — and lets you build smarter benefits packages for your team.

Related: W-2 Reporting, Employee Benefits

ACA reporting requirements

The IRS requires ALEs to report on the healthcare coverage they offered (or didn’t offer) throughout the year. This includes:

• Form 1095-C: Sent to employees to show the coverage offered, when, and how much it cost
• Form 1094-C: A summary of all 1095-Cs submitted, sent to the IRS

Filing these forms accurately and on time is critical. Mistakes or missed deadlines can trigger penalties that add up fast. Fingercheck helps prevent that.

Common ACA compliance challenges

• Tracking eligibility: Knowing when variable-hour employees hit full-time status
• Monitoring affordability: Ensuring employee contributions stay under IRS thresholds
• Managing complex rosters: Especially if you’re in construction or staffing
• Generating forms: Preparing and distributing IRS forms accurately each year

ACA compliance isn’t just a one-time setup — it’s ongoing tracking, calculations, and adjustments. Manual systems won’t cut it for long.

ACA and payroll integration

The smartest way to manage ACA compliance? Automate it directly within your payroll and HR platform. Here’s how Fingercheck helps:

• Automatically track hours for ACA eligibility
• Flag employees approaching full-time status
• Monitor plan affordability based on IRS safe harbor methods
• Generate and file Forms 1094-C and 1095-C on your behalf
• Keep historical records in case of audits or inquiries

Because ACA is tied directly to your workforce data — hours, earnings, classifications — it makes sense to manage it where you already process that data.

ACA use cases for employers

Whether you’re growing, seasonal, or simply managing a large crew, the ACA can affect you in unexpected ways. Here are some real-world scenarios:

• A landscaping company with 80 employees across multiple states needs help tracking eligibility and hours for ACA compliance
• A healthcare staffing agency wants to ensure part-time clinicians don’t inadvertently trigger full-time thresholds
• A restaurant franchise must report coverage for employees working shifts at different locations, with complex schedules

These aren’t hypothetical. They’re exactly the types of businesses Fingercheck supports with built-in ACA tracking tools.

In summary

Staying ACA compliant isn’t just about ticking boxes — it’s about protecting your business, your team, and your bottom line.

Discover how Fingercheck’s HR tools and payroll platform make ACA compliance easier — so you can focus on running your business, not running reports.

Fingercheck and any related entities do not offer tax, accounting, or legal advice. This content is designed for informational purposes only and should not be considered a source of tax, legal, or accounting advice. It is recommended that you consult your tax, legal, and accounting advisors before undertaking any related activities or transactions.