The IRS has updated the employer shared responsibility (ESR) payment amounts for 2027 under the Affordable Care Act (ACA) [Rev. Proc. 2026-22, 5-4-26]. The ESR payment amounts for 2027 are $3,780 and $5,670 (up from $3,340 and $5,010 for 2026).
Background
Under the ACA, applicable large employers (ALEs) that do not offer minimum essential coverage (MEC) or offer it to fewer than 95% of their full-time employees (and their dependents) owe an ESR payment equal to the number of full-time employees (not full-time equivalents) the employer employed for the year (minus up to 30) multiplied by $3,780 for 2027, as adjusted annually for inflation, as long as at least one full-time employee gets health insurance through an Exchange and receives the premium tax credit.
If ALEs offer MEC to at least 95% of their full-time employees (and their dependents), but at least one employee still obtains insurance through an Exchange and gets a premium tax credit, the employers’ payment is computed separately for each month. The amount of the payment for the month equals the number of full-time employees who receive a premium tax credit for that month multiplied by 1/12 of $5,670 for 2027, as adjusted annually for inflation.
The amount of the payment for any calendar month is capped at the number of the full-time employees (not full-time equivalents) for the month (minus up to 30) multiplied by 1/12 of $3,780 for 2027.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!
Jyme Mariani, Esq., is Director of Payroll Information Resources for PayrollOrg.
