If your employer doesn’t offer health insurance, you may be able to get coverage through an ACA Marketplace plan. Depending on your income, you may qualify for a premium tax credit, which can lower your Marketplace plan’s premium and make getting coverage more affordable.
Read on to learn more about when employers are required to provide health benefits and what your options are if they don’t.
| Key Takeaways .Employers with at least 50 full-time or full-time equivalent employees are required to provide affordable coverage to at least 95% of those employees if at least one qualifies for a premium tax credit. .Applicable large employers (ALEs) that don’t offer coverage to qualifying employees can face penalties for each employee who doesn’t receive adequate coverage. .If you don’t qualify for employer-based health benefits, you can typically get coverage through the federal Health Insurance Marketplace or your state’s equivalent. .Depending on your income, you may qualify for a premium tax credit to help lower your Marketplace plan’s monthly premium. |
Are Employers Required To Provide Health Insurance for Employees?
Employers may be required under the Affordable Care Act (ACA) to provide health insurance to certain employees. However, this requirement depends on the number of employees an employer has and whether they are full-time or part-time.
When Are Employers Required To Offer Health Insurance?
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Employers with a minimum number of full-time employees — referred to as applicable large employers (ALEs) under the Affordable Care Act (ACA) — are required to offer health insurance to at least 95% of those employees and their dependents.[1] Additionally, at least one full-time employee must be eligible for an ACA premium tax credit for the employer mandate to apply.[2]
The coverage offered by employers that meet this employment threshold must also be affordable, with adjustments made annually to account for inflation. For example, in 2026 employers must ensure that an employee’s share of the premium does not exceed 9.96% of their income.[3]
Coverage must provide access to a broad network of both primary care providers and specialists, ensuring that employees have a range of options for receiving care. It must also meet minimum value requirements, meaning the plan must cover at least 60% of the total cost of medical services.[1][4]
What Is the Penalty for Not Offering Health Insurance to Employees?
Penalties for failing to offer adequate health insurance to employees are split into “A” and “B” penalties, each with its own calculation method.
Penalty “A”
This penalty applies to employers that fail to offer minimum essential coverage (MEC) to at least 95% of full-time employees, with at least one qualifying for an ACA premium tax credit. The annual penalty is $3,340 per full-time employee in 2026.[1]
For example, if a company with more than 50 full-time employees had 10 employees who did not receive MEC and also qualified for a premium tax credit, the company would be penalized approximately $33,400.
Penalty “B”
This penalty applies to those employers that fail to offer affordable coverage that meets minimum value requirements, and have at least one employee who receives an ACA premium tax credit. The annual penalty is $5,010 per full-time employee in 2026.[1]
For example, if a company with more than 50 full-time employees had 10 employees who did not receive adequate coverage and also qualified for a premium tax credit, the company would be penalized approximately $50,100.
Why Would an Employer Not Offer Health Insurance?
An employer may choose not to offer health insurance if it doesn’t qualify as an applicable large employer (ALE) and has fewer than 50 full-time or full-time equivalent employees. While there are potential tax credits available for qualifying employers that don’t meet the ALE threshold to provide health coverage, some employers may choose not to do so to avoid additional expenses or administrative work.[5]
How Big Does a Company Have To Be To Provide Benefits?
Companies with at least 50 full-time employees for an entire calendar year are required to provide health insurance benefits or face penalty fees. For example, if you joined a company as the 50th full-time employee, your employer would not be required to offer you health insurance until the following calendar year.
What To Do if Your Employer Doesn’t Provide Health Insurance
If your employer doesn’t offer health insurance — either because it doesn’t qualify as an ALE or you aren’t a full-time or full-time equivalent employee — you should consider enrolling in a Health Insurance Marketplace plan. Depending on your income and other factors, you may qualify for a premium tax credit to help make coverage more affordable. If you aren’t eligible for a Marketplace plan, you may be able to purchase a private health insurance plan, although you won’t qualify for tax credits and will need to pay the full premium amount. Because these plans aren’t always ACA-compliant, they may exclude individuals with preexisting conditions or fail to cover all essential health benefits.[6]
If you choose not to purchase health insurance, you’ll likely need to pay out of pocket for all medical expenses.
How To Get Health Insurance From the ACA Marketplace
To get a Marketplace health insurance plan, you must first determine whether you’re eligible. For example, only individuals who live in the United States, are U.S. citizens, are not incarcerated or are lawfully present noncitizens — such as green card holders or refugees — qualify to enroll.[7][8]
If you qualify, you can apply during the annual open enrollment period, which runs from Nov. 1 to Jan. 15 in most states.[9] However, if you qualify for a special enrollment period by experiencing a significant life event — such as turning 26 and losing coverage under a parent’s plan or starting a new job — you can enroll in a Marketplace plan outside the standard enrollment window.[10]
You can apply for an ACA Marketplace plan online, in person, by mail, over the phone or through an insurance company or enrollment partner.[11]
How To Get Health Insurance if You Can’t Afford It
If you can’t afford health insurance, you may qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP). Whether you qualify for Medicaid or CHIP depends on where you live, as states vary in their maximum annual income requirements.[13]
If you’re 65 or older and meet other eligibility criteria, you may also qualify for Medicare, which can serve as a low-cost insurance option.[14]
Why Securing Health Insurance Is Important
Without health insurance, you’re responsible for paying medical expenses out of pocket. This can significantly increase the cost of standard primary care. For example, most primary care visits require a copayment of $10 to $50 with insurance, but without coverage, you could pay between $150 and $300 for a single visit.[15]
Even if you’re relatively healthy and believe you can go without health insurance, you may face a significant financial burden if you need emergency care. For instance, an emergency room visit averages about $412 after meeting your deductible but can cost around $2,600 without coverage.[16]
Securing health insurance through your employer, the Marketplace or directly from an insurance company can help you avoid these added costs. Be sure to compare plans carefully to find coverage that meets your needs and budget at an affordable premium.
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FAQs
Is it better to get health insurance through an employer or on your own?
Getting health insurance through your employer may be more cost-effective since they typically cover part of your premium, although your network or benefits may change based on your employer’s decisions. Buying an individual health insurance plan allows you to choose a provider with your preferred network coverage, which won’t change unless the insurer modifies benefits in your area.[17]
Do part-time workers get health insurance?
Employers are not federally required to offer health insurance to part-time employees, even if they qualify as an applicable large employer (ALE).[18] However, some employers may choose to offer benefits to part-time employees, even though it’s not required by law.
Is health insurance required?
Health insurance is not required at the federal level.[19] However, some states — including California, New Jersey, Rhode Island and Massachusetts — and Washington D.C., have individual mandates that may result in state tax penalties for residents without coverage.[20]
Does the IRS penalize you for not having health insurance?
No, there is no federal penalty for being uninsured, as the tax penalty for lacking coverage was eliminated in 2018.[19]
Can I refuse health insurance from my employer?
Yes, you can decline health insurance from your employer. However, if you have access to employer-based coverage, you may not qualify for a premium tax credit through the Marketplace unless the offered coverage is considered unaffordable.[21]
