Instructions

The estimator starts by asking for the tax year. Some figures used in determining the payment are indexed to inflation. Because of this, for future years the estimator cannot provide a detailed estimate.

Determining the Payment for 2015

This estimator is designed only for 2016 and forward.

For 2015, transition rules are applied in determining the payment. For information about these rules and how to determine the payment for 2015, see the ESRP Regulations.

This step estimates whether you have 50 or more full-time employees (including full-time equivalents). If so, you are an applicable large employer and subject to the provision. It will also ask about your status as an employer - if you were in existence for the preceding calendar year and whether you are part of an aggregated group of employers.

Existence as an Employer

An employer is treated as not having been in existence throughout the preceding calendar year only if the employer was not in existence on any business day in the preceding calendar year.

If you were in existence as an employer in the preceding calendar year: Enter the employee figures for the preceding calendar year.

If you were not in existence as an employer in the preceding calendar year: An employer not in existence throughout the preceding calendar year is an applicable large employer for the current calendar year if the employer is reasonably expected to employ an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the current calendar year and it actually employs an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the calendar year.

Enter the employee figures that you reasonably expect to have for the calendar year.

Member of an Aggregated Group

An aggregated group of employers is a group of commonly owned or otherwise related or affiliated employers, which must combine their employees to determine whether they together constitute an applicable large employer. All employers that are treated as a single employer under IRC section 414(b), (c), (m), or (o) are treated as members of an aggregated group.

If you are not a member of an aggregated group of employers: The estimator will ask you to enter the number of your full-time employees and seasonal workers as well as the total hours of your seasonal workers and non-seasonal employees who are not full-time.

If you are a member of an aggregated group of employers: The estimator will ask you to enter the total number of all members - including yourself - per month of the full-time employees and full-time seasonal workers, and hours of the part-time employees and part-time seasonal workers. Additionally, enter the total number of your own full-time employees and full-time seasonal workers. The estimates provided in Step Three – Payment Scenarios will be based on the number of your own full-time employees and not on the full-time employees of other members of your aggregated group.

This step will show you what the payments may be based on the employee information you enter in Step 2. It will also show you comparisons with other scenarios by allowing you to change the number of full-time employees used to determine the payment.

Payments

There are two types of payments: the payment under 4980H(a) and 4980H(b). You cannot be liable for more than one of these payments in the same month.

Either payment depends on whether any of your employees receives the premium tax credit. You may not know whether your employees receive the credit before hearing from the IRS, so the estimates below are those of the most you may have to pay under both section 4980H(a) and section 4980H(b).

For 4980H(a), the estimator assumes that:

• You do not make an offer of coverage to at least 95% of your full-time employees and
• At least one full-time employee receives the premium tax credit.

For the payment under 4980H(b), the estimator assumes that:

• You do make an offer of coverage to at least 95% of your full-time employees, but
• ALL of your full-time employees receive the premium tax credit.

Comparing Scenarios

The estimator contains a table for each payment that shows the estimated payments per month, based on the employee information you enter.

The payments shown in the "Full-time Employee" and "Estimated Payment" columns are estimated based on the full-time employee information you entered in Step 2. Compare this with other scenarios by changing the number of full-time employees in the "Compare" column.

This step is optional. It is a guide to the two methods of measuring your employees' hours of service and allows you to enter information on one employee and see how the methods work to make a determination.

The two measurement methods are:

• The monthly measurement method, and
• The look-back measurement method.

Choose which method you use and enter the information about it and an employee. The estimator will guide you through how the full-time status determination is made. More information about each method is in The Provision section.

Under the look-back measurement method, an optional period you select that is no longer than 90 days that begins immediately after the end of a measurement period and ends immediately before the start of the associated stability period.

The administrative period also includes the period between a new employee's start date and the beginning of the initial measurement period, if the initial measurement period does not begin on the employee's start date.

Generally, coverage is affordable for an employee if the employee's required contribution of the annual premium for self-only coverage does not exceed 9.5% (as adjusted for inflation) of the employee's household income for the year. For more information, see Minimum Value and Affordability on IRS.gov.

An offer of coverage is also deemed affordable for purposes of the provision if the offer satisfies one of the affordability safe harbors listed in the ESRP final regulations. For additional details about the affordability safe harbors, see Q&A on the ESRP at IRS.gov.

A group of commonly owned or otherwise related or affiliated employers, which must combine their employees to determine whether they together constitute an applicable large employer. All employers that are treated as a single employer under IRC section 414(b), (c), (m), or (o) are treated as members of an aggregated group.

An employer that, together with one or more other employers, is a member of an aggregated group that is an applicable large employer.

For example, parent corporation A had 40 full-time employees in the preceding calendar year; subsidiary B, which is wholly owned by A, had 10 full-time employees in the preceding calendar year; and subsidiary C, which is also wholly owned by A, had 5 full-time employees in the preceding calendar year. Together, employers A, B, and C form an aggregated group that is an applicable large employer because the group employed on average 55 full-time employees in the preceding year. A, B, and C is each an ALE member, and each is therefore separately subject to the requirements of the employer shared responsibility provision.

With respect to a calendar year, an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. Employees of all members of an aggregated group are combined together for purposes of determining if the group is an applicable large employer, and if each member of the aggregated group is therefore an ALE member.

If you, as an employer, were not in existence throughout the preceding calendar year, you would be an applicable large employer for the current calendar year if you reasonably expect to employ an average of at least 50 full-time employees (taking into account FTEs) on business days during the current calendar year and you actually employ an average of at least 50 full-time employees (taking into account FTEs) on business days during the calendar year.

An employee resuming services is an employee with a prior period of employment (such as a rehire or after a period of leave) and may be treated as either a new or ongoing employee according to the rehire and continuing employee rules.

Generally, with respect to a calendar month, an employee who is employed an average of at least 30 hours of service per week.

For this purpose: 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week, and this 130 hours of service equivalency applies for both the look-back measurement method and the monthly measurement method for determining full-time employee status.

A combination of employees, each of whom individually is not treated as a full-time employee because he or she is not employed on average at least 30 hours of service per week with an employer, who, in combination, are counted as the equivalent of a full-time employee solely for the purposes of determining whether the employer is an applicable large employer.

The number of full-time equivalent employees for each calendar month is determined by calculating the aggregate number of hours of service for that calendar month for employees who were not full-time employees (but not more than 120 hours of service for any employee) and dividing that number by 120.

The hours for which an employee is paid, or entitled to payment, for the performance of duties for the employer; and each hour for which an employee is paid, or entitled to payment by the employer for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.

Certain hours are excluded from hours of service; for more information, see the ESRP Regulations.

Under the look-back measurement method, a period of at least three but not more than 12 consecutive months that is used to determine the full-time status of your new employees. A new employee that averages at least 30 hours of service per week during the initial measurement period is treated as a full-time employee through the end of the associated stability period that follows.

One of the two methods for determining whether an employee is a full-time employee (the other is the monthly measurement method). Under the look-back measurement method for ongoing employees, each ongoing employee's full-time employee status during a stability period is determined based on hours worked during the associated measurement period.

If the employee was employed on average at least 30 hours of service per week during the associated measurement period, then the employee is a full-time employee during the subsequent stability period, regardless of the employee's number of hours of service during the stability period, so long as he or she remains an employee.

For the employer shared responsibility provision, minimum essential coverage has the same meaning as in the individual shared responsibility provision.

Minimum essential coverage means coverage under a government-sponsored program, an eligible employer-sponsored plan, a plan in the individual market, a grandfathered health plan, or other health benefits coverage.

See the Individual Shared Responsibility Provision regulations for more information.

An eligible employer-sponsored plan provides minimum value only if the plan’s share of the total allowed costs of benefits provided to the employee under the plan (as determined under guidance issued by the Secretary of Health and Human Services) is at least 60 percent. For more information, see Minimum Value and Affordability on IRS.gov.

One of the two methods for determining whether an employee is a full-time employee (the other is the look-back measurement method). Under the monthly measurement method, each employee's status as a full-time employee is determined by counting the employee's hours of service for each calendar month.

Under the look-back measurement method, a new employee is an employee who has been employed for less than one complete standard measurement period.

Under the look-back measurement method, an ongoing employee is an employee who has been employed for at least one complete standard measurement period.

A seasonal employee is an employee who is hired into a position for which the customary annual employment is six months or less.

This term is used for determining the full-time status of employees if the employer is using the look-back measurement method.

A seasonal worker means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including (but not limited to) workers covered by 29 CFR 500.20(s)(1), and retail workers employed exclusively during holiday seasons.

This term is used in whether the seasonal worker exception applies for determining your applicable large employer status.

With respect to any calendar month, 1/12 of $2,000, as adjusted for inflation. The adjusted amount is $2,160 for 2016 and $2,260 for 2017.

If this liability is owed under section 4980H(a) for a calendar month, the amount of the payment is calculated by multiplying the section 4980H(a) applicable payment amount by the total number of full-time employees that you employ in that calendar month, with certain adjustments (for instance, the number of full-time employees is generally reduced by 30, and certain full-time employees in a limited non-assessment period may also be excluded).

With respect to any calendar month, 1/12 of $3,000, as adjusted for inflation. The adjusted amount is $3,240 for 2016 and $3,390 for 2017.

If liability is owed under section 4980H(a) for a calendar month, the amount of the payment is calculated by multiplying the section 4980H(b) applicable payment amount by the number of full-time employees who receive the premium tax credit in that month, with certain adjustments (for example, full-time employees in a limited non-assessment period may be excluded).

Under the look-back measurement method, a period you select that immediately follows and is associated with a standard measurement period or an initial measurement period (and if elected, the administrative period associated with that standard measurement period or initial measurement period).

The full-time status of an employee during the stability period is determined based on the employee's average hours of service in the associated measurement period.

Under the look-back measurement method, the standard measurement period is a period of at least three but not more than 12 consecutive months that is used to determine the full-time status of your employees. Each employee who averages at least 30 hours of service per week during the standard measurement period is treated as a full-time employee for each month during the associated stability period that follows.

Alternatively, 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week. Thus, an employee that averages at least 130 hours of service per month in the standard measurement period is treated as a full-time employee during the associated stability period that follows.

Under the look-back measurement method, if an employer cannot determine, based on the facts and circumstances at an employee’s start date, whether the employee is reasonably expected to be employed on average at least 30 hours of service per week during the initial measurement period because the employee’s hours are variable or otherwise uncertain, the employee is a variable hour employee.