2027 ACA Contribution Calculator for Employers

• Non-full-time employee hours are converted using the 120-hour divisor, with hours capped at 120 per employee per month for the FTE calculation.
• Full-time status is screened at 30 hours per week or 130 hours per month.
• Affordability is screened using the Federal Poverty Line safe harbor.
• Common-ownership information is accepted as entered; the calculator does not determine whether entities form a controlled or affiliated service group under §414.
• Results use the 2027 figures built into this calculator.

The calculator is a planning and screening tool. Results depend on the accuracy and completeness of the information entered. 

A “Not an ALE” result depends on the workforce information entered. Missing hours of service, paid leave, or related entities could change the result.

An “Affordability Risk” result means the Federal Poverty Line method did not clear the screen. It does not automatically mean a penalty is owed. The W-2 or Rate of Pay safe harbors may produce a different result.

Related businesses may need to be counted together when determining ALE status. This calculator uses the ownership information you enter but does not determine whether a controlled group, affiliated service group, or other aggregation relationship exists under applicable law.

Employers with multiple entities or complex ownership structures should confirm the appropriate aggregation analysis with qualified advisers.

Calculator results are planning indicators, not legal determinations or filing positions.

Clearly under 50

Document the calculation and review ALE status annually, particularly as your workforce grows.

Near 50

Recalculate using actual monthly hours of service and review whether related entities must be counted together.

50 or more

Confirm ALE status using complete prior-year workforce data and review your employer-mandate and reporting responsibilities.

ALE + affordability screen clears

Document the safe harbor being used and confirm the plan's other ACA requirements before implementation.

ALE + affordability risk

Review the contribution structure, safe-harbor options, minimum value, and applicable plan terms before the plan year begins. Legal or tax questions should be reviewed with qualified counsel or a tax adviser.

Need help turning the result into a 2027 benefits strategy? Request a 4J Benefits Review

For 2027, the ACA employer mandate uses the following indexed penalty amounts for Applicable Large Employers (ALEs):

• §4980H(a): $3,780 per year ($315 per month) — may apply when an ALE fails to offer qualifying health coverage to at least 95% of its full-time employees and their dependents, and at least one full-time employee receives a Marketplace premium tax credit.
• §4980H(b): $5,670 per year ($472.50 per month) — may apply for each full-time employee who receives a Marketplace premium tax credit because the coverage offered was unaffordable or did not provide minimum value.

These are not automatic fines. Actual liability depends on the employer’s workforce, coverage offered, employee eligibility for premium tax credits, and other applicable facts.

Related businesses may need to be counted together when determining ALE status, although the calculator does not determine whether a controlled group or other §414 aggregation relationship exists.

Authority: IRS Revenue Procedure 2026-22 and IRS Employer Shared Responsibility guidance.

1. Rev. Proc. 2026-26, § 3.02 — Internal Revenue Service (plan year 2027)Supports: The required contribution percentage the tool applies. Verified 16 August 2026
2. Determining if an Employer is an Applicable Large Employer — Internal Revenue Service Supports: The counting method the tool implements. Verified 16 August 2026 2027 Employer Shared Responsibility Payment Amounts: Rev. Proc. 2026-22, § 2 — Internal Revenue Service (plan year 2027)Supports: 2027 Employer Shared Responsibility Payment Amounts under IRC § 4980H(a) and § 4980H(b). The 2027 values are:§ 4980H(a): $3,780 annually§ 4980H(b): $5,670 annually. Verified 16 August 2026
   
   

   Explanatory guidance

   1. Determining if an Employer is an Applicable Large Employer — Internal Revenue Service Supports: The counting method the tool implements. Verified 16 August 2026

Last reviewed 16 August 2026. Next review: upon publication of any IRS or HHS guidance that materially affects the 2027 affordability calculations, or before publication of the 2028 ACA affordability calculator. The tool currently applies 2027 plan-year figures only; and is maintained separately from the 2026 ACA Affordability Calculator. 4J Insurance is an independent commercial insurance brokerage, powered by PGI, based in Frisco, Texas. This tool provides general educational and planning information and does not constitute legal advice, tax advice, actuarial advice, or a determination of ACA compliance. 

 It estimates Applicable Large Employer status by combining the full-time employees and ACA full-time equivalent employees you enter. For ALE purposes, a full-time employee generally averages at least 30 hours of service per week or 130 hours per month. Hours for non-full-time employees are capped at 120 per employee per month, combined, and divided by 120 to determine FTEs. Actual ALE status generally depends on the employer's average monthly workforce during the preceding calendar year, so this calculator is a screening tool rather than a formal ALE determination. 

 Businesses with common or related ownership may need to be treated as a single employer when determining Applicable Large Employer status under Internal Revenue Code §414. If the combined group meets the ALE threshold, each business in the aggregated group can be an ALE member even if it would not meet the threshold by itself. This calculator lets you include related businesses in the workforce screen, but it does not determine whether the legal aggregation rules apply to your ownership structure. 

 This calculator uses the Federal Poverty Line safe harbor. The IRS also permits employers to use the Form W-2 wages safe harbor and the Rate of Pay safe harbor for purposes of the employer shared responsibility provisions. Those methods can produce different affordability results depending on the employer's facts. A result from this calculator should therefore be treated as an FPL safe-harbor screen, not a determination that the other affordability safe harbors would pass or fail. 

 For §4980H purposes, an ALE member generally must offer minimum essential coverage to at least 95% of its full-time employees and their dependents to avoid potential exposure to the first Employer Shared Responsibility Payment. If the employer falls below that threshold and at least one full-time employee receives a premium tax credit through the Marketplace, potential §4980H liability may arise. This calculator screens the offer percentage you enter; it does not determine whether a payment is actually owed. 

 An employer-sponsored health plan generally provides minimum value if it is designed to cover at least 60% of the total allowed cost of benefits and meets the applicable requirements concerning substantial inpatient hospital and physician services. The calculator asks you whether the plan provides minimum value rather than attempting to calculate minimum value from plan-design data it does not collect. 

 For the Employer Shared Responsibility affordability safe harbors, the employee affordability test generally uses the employee's required contribution for the lowest-cost self-only coverage option that provides minimum value and is available to that employee. Family-coverage affordability can affect premium-tax-credit eligibility for family members, but that is a separate determination. That is why this employer calculator asks for the employee's self-only contribution.