Avoiding Affordable Care Act (ACA) penalties can make or break a company’s bottom line — especially for self-funded employers. One of the costliest mistakes under the ACA is failing to meet the 4980H(a) employer mandate, which requires that at least 95% of full-time employees are offered minimum essential coverage (MEC).
Here’s a real case from one of our clients that shows how quickly these penalties can add up — and how ACA-Track helped prevent it.
The Risk in Action
The employer had 75 full-time employees. Unfortunately, MEC wasn’t extended to at least 95% of the workforce (just five short), and that single gap was enough to trigger ACA risk exposure.
- Employer Size: 75 full-time employees
- Triggering Event: One uncovered employee qualified for a premium tax credit through the exchange
- 2025 Penalty Formula: $2,900 × (Total full-time employees − 30)
- Potential Penalty: (75 − 30) × $2,900 = $130,500
With the IRS now issuing more 226-J letters than in past years, the chances of this penalty being enforced were extremely high.
How ACA-Track Prevented the Penalty
Before the reporting year ended, ACA-Track’s technology flagged the gap. Immediately, the employer’s dedicated ACA compliance specialist stepped in, explained the issue clearly, and provided a correction plan. Together, they ensured that the missing coverage offers were made on time.
This proactive approach meant the employer stayed fully compliant — and avoided a $130,500 fine.
- Annual ACA-Track Cost: ~$3,000
- Penalty Avoided: $130,500
- ROI: Over 43.5x return on investment
Why This Matters
According to a recent McKinsey Report, self-funded employers expect at least a 2:1 ROI from each vendor. By avoiding one penalty alone, ACA-Track delivered more than 20 times that benchmark — a return that’s hard to ignore.
For self-funded employers, this isn’t just about compliance. It’s about protecting plan assets, preventing IRS enforcement, and securing long-term financial stability.
About ACA-Track
ACA-Track is a complete ACA compliance solution designed for employers, TPAs, and brokers who want to eliminate reporting risk. With over 35 years in the industry, we’ve processed millions of ACA forms nationwide — and our clients have maintained 100% IRS compliance, meaning no penalties, ever.
Our services include:
- End-of-year ACA reporting for IRS compliance
- Real-time eligibility tracking
- Hands-on support from experienced ACA compliance specialists
By combining powerful software with personalized service, ACA-Track ensures compliance, accuracy, and peace of mind year after year.
Contact: Stephen Loiseau, Head of Sales, at stephen@aca-track.com or visit aca-track.com.
