PPACA's employer rules apply to an applicable large employer (ALE): one that averaged at least 50 full-time employees, including full-time equivalents, in the preceding year. Part-time hours do count. Each month, add the part-time employees' hours (no more than 120 per person) and divide by 120. Example: 38 full-time employees plus 24 part-timers working 60 hours each (1,440 ÷ 120 = 12) gives 50, so the employer is an ALE.
Affordability: an offer is affordable if the employee's required contribution, generally the cost of the least expensive coverage offered that provides minimum value, is no more than 9.5% (as adjusted each year) of household income. Employers rarely know household income, so they may use safe harbors based on W-2 wages, rate of pay, or the federal poverty line.
Minimum value: the plan covers at least 60% of the total allowed cost of benefits and gives substantial coverage of inpatient hospital and physician services.
Employer shared responsibility payments:
An ALE that offers coverage to fewer than 95% of its full-time employees (and their dependents) can owe a payment figured on all full-time employees, minus up to 30.
An ALE that does offer coverage to at least 95% can still owe a payment when a full-time employee gets a premium tax credit because the offer was unaffordable. That payment is based on the number of full-time employees who get the credit, capped at what a non-offering employer would pay.
An employer that is not an ALE owes nothing under these rules. Dollar amounts are indexed every year.