Affordable Care Act (ACA)

The Patient Protection and Affordable Care Act (PPACA), more commonly called the Affordable Care Act (ACA) is federal legislation signed into law by President Obama in March 2010. This comprehensive healthcare reform law aims to expand Americans' access to affordable healthcare insurance.

The Individual Mandate became effective January 1, 2014 and requires most Americans to have medical insurance, otherwise they may be subject to a tax penalty. The Employer Mandate requires an employer with 50 or more full-time employees to offer affordable, minimal value health insurance to employees and their children up to age 26 and is referred to as the Employer Shared Responsibility (ESR). This portion of the law became effective January 1, 2015 and includes employer penalties and reporting requirements.

Employers subject to the ESR are required to measure an employee’s hours of service over a period of time and if the employee is determined to be full-time (for ACA: 30 hours per week), offer coverage to that employee for an equal period of time regardless of the number of hours worked during that period as long as the employee is still employed.

The law has no effect on the eligibility of employees currently in an employment category that is eligible for healthcare coverage. Under the ACA, employees that are not already health-benefit eligible may now qualify for medical insurance.