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2025 Employer Shared Responsibility Penalties

The IRS has released the 2025 employer shared responsibility payments under the Affordable Care Act (ACA). Applicable large employers (ALEs) may face penalties for failing to provide minimum essential coverage to 95% of full-time employees, or for offering coverage that is not affordable or does not meet minimum value. The adjusted penalty amounts for 2025 will be $2,900 per full-time employee for Penalty “A” (a $70 decrease from 2024) and $4,350 per full-time employee for Penalty “B” (a $110 decrease from 2024).



To avoid penalties, ALEs should consistently ensure full-time employees receive minimum essential coverage that meets affordability and minimum value standards. The IRS uses Letter 226-J to notify ALEs of potential penalties, with a response form included for ALEs to address proposed penalties. Employers and advisors should remain vigilant for this letter to promptly review and respond accordingly.