26 U.S.C. § 4980H — Shared responsibility for employers re-

Page 3116 TITLE 26—INTERNAL REVENUE CODE § 4980H (b) Rules and requirements Rules and requirements similar to the rules and requirements of section 4980E shall apply for purposes of this section. (c) Regulations The Secretary shall issue regulations to carry out the purposes of this section, including regu- lations providing special rules for employers who make contributions to Archer MSAs and health savings accounts during the calendar year. (d) Exception For purposes of applying section 4980E to a contribution to a health savings account of an employee who is not a highly compensated em- ployee (as defined in section 414(q)), highly com- pensated employees shall not be treated as com- parable participating employees. (Added Pub. L. 108–173, title XII, § 1201(d)(4)(A), Dec. 8, 2003, 117 Stat. 2478; amended Pub. L. 109–432, div. A, title III, § 306(a), Dec. 20, 2006, 120 Stat. 2951.) Editorial Notes AMENDMENTS 2006—Subsec. (d). Pub. L. 109–432 added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–432, div. A, title III, § 306(b), Dec. 20, 2006, 120 Stat. 2951, provided that: ‘‘The amendment made by this section [amending this section] shall apply to tax- able years beginning after December 31, 2006.’’ EFFECTIVE DATE Section applicable to taxable years beginning after Dec. 31, 2003, see section 1201(k) of Pub. L. 108–173, set out as an Effective Date of 2003 Amendment note under section 62 of this title. § 4980H. Shared responsibility for employers re- garding health coverage (a) Large employers not offering health coverage If— (1) any applicable large employer fails to offer to its full-time employees (and their de- pendents) the opportunity to enroll in min- imum essential coverage under an eligible em- ployer-sponsored plan (as defined in section 5000A(f)(2)) for any month, and (2) at least one full-time employee of the ap- plicable large employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having enrolled for such month in a qualified health plan with respect to which an applicable pre- mium tax credit or cost-sharing reduction is allowed or paid with respect to the employee, then there is hereby imposed on the employer an assessable payment equal to the product of the applicable payment amount and the number of individuals employed by the employer as full- time employees during such month. (b) Large employers offering coverage with em- ployees who qualify for premium tax credits or cost-sharing reductions (1) In general If— (A) an applicable large employer offers to its full-time employees (and their depend- ents) the opportunity to enroll in minimum essential coverage under an eligible em- ployer-sponsored plan (as defined in section 5000A(f)(2)) for any month, and (B) 1 or more full-time employees of the applicable large employer has been certified to the employer under section 1411 of the Pa- tient Protection and Affordable Care Act as having enrolled for such month in a quali- fied health plan with respect to which an ap- plicable premium tax credit or cost-sharing reduction is allowed or paid with respect to the employee, then there is hereby imposed on the employer an assessable payment equal to the product of the number of full-time employees of the ap- plicable large employer described in subpara- graph (B) for such month and an amount equal to 1⁄12 of $3,000. (2) Overall limitation The aggregate amount of tax determined under paragraph (1) with respect to all em- ployees of an applicable large employer for any month shall not exceed the product of the applicable payment amount and the number of individuals employed by the employer as full- time employees during such month. (c) Definitions and special rules For purposes of this section— (1) Applicable payment amount The term ‘‘applicable payment amount’’ means, with respect to any month, 1⁄12 of $2,000. (2) Applicable large employer (A) In general The term ‘‘applicable large employer’’ means, with respect to a calendar year, an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year. (B) Exemption for certain employers (i) In general An employer shall not be considered to employ more than 50 full-time employees if— (I) the employer’s workforce exceeds 50 full-time employees for 120 days or fewer during the calendar year, and (II) the employees in excess of 50 em- ployed during such 120-day period were seasonal workers. (ii) Definition of seasonal workers The term ‘‘seasonal worker’’ means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including workers covered by section 500.20(s)(1) of title 29, Code of Fed- eral Regulations and retail workers em- ployed exclusively during holiday seasons. (C) Rules for determining employer size For purposes of this paragraph— (i) Application of aggregation rule for em- ployers All persons treated as a single employer under subsection (b), (c), (m), or (o) of sec- Page 3117 TITLE 26—INTERNAL REVENUE CODE § 4980H 1 So in original. Probably means subclause (I) or (II) of clause (i). tion 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer. (ii) Employers not in existence in pre- ceding year In the case of an employer which was not in existence throughout the preceding cal- endar year, the determination of whether such employer is an applicable large em- ployer shall be based on the average num- ber of employees that it is reasonably ex- pected such employer will employ on busi- ness days in the current calendar year. (iii) Predecessors Any reference in this subsection to an employer shall include a reference to any predecessor of such employer. (D) Application of employer size to assess- able penalties (i) In general The number of individuals employed by an applicable large employer as full-time employees during any month shall be re- duced by 30 solely for purposes of calcu- lating— (I) the assessable payment under sub- section (a), or (II) the overall limitation under sub- section (b)(2). (ii) Aggregation In the case of persons treated as 1 em- ployer under subparagraph (C)(i), only 1 re- duction under subclause (I) or (II) 1 shall be allowed with respect to such persons and such reduction shall be allocated among such persons ratably on the basis of the number of full-time employees employed by each such person. (E) Full-time equivalents treated as full-time employees Solely for purposes of determining wheth- er an employer is an applicable large em- ployer under this paragraph, an employer shall, in addition to the number of full-time employees for any month otherwise deter- mined, include for such month a number of full-time employees determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 120. (F) Exemption for health coverage under TRICARE or the Department of Veterans Affairs Solely for purposes of determining wheth- er an employer is an applicable large em- ployer under this paragraph for any month, an individual shall not be taken into ac- count as an employee for such month if such individual has medical coverage for such month under— (i) chapter 55 of title 10, United States Code, including coverage under the TRICARE program, or (ii) under a health care program under chapter 17 or 18 of title 38, United States Code, as determined by the Secretary of Veterans Affairs, in coordination with the Secretary of Health and Human Services and the Secretary. (3) Applicable premium tax credit and cost- sharing reduction The term ‘‘applicable premium tax credit and cost-sharing reduction’’ means— (A) any premium tax credit allowed under section 36B, (B) any cost-sharing reduction under sec- tion 1402 of the Patient Protection and Af- fordable Care Act, and (C) any advance payment of such credit or reduction under section 1412 of such Act. (4) Full-time employee (A) In general The term ‘‘full-time employee’’ means, with respect to any month, an employee who is employed on average at least 30 hours of service per week. (B) Hours of service The Secretary, in consultation with the Secretary of Labor, shall prescribe such reg- ulations, rules, and guidance as may be nec- essary to determine the hours of service of an employee, including rules for the applica- tion of this paragraph to employees who are not compensated on an hourly basis. (5) Inflation adjustment (A) In general In the case of any calendar year after 2014, each of the dollar amounts in subsection (b) and paragraph (1) shall be increased by an amount equal to the product of— (i) such dollar amount, and (ii) the premium adjustment percentage (as defined in section 1302(c)(4) of the Pa- tient Protection and Affordable Care Act) for the calendar year. (B) Rounding If the amount of any increase under sub- paragraph (A) is not a multiple of $10, such increase shall be rounded to the next lowest multiple of $10. (6) Other definitions Any term used in this section which is also used in the Patient Protection and Affordable Care Act shall have the same meaning as when used in such Act. (7) Tax nondeductible For denial of deduction for the tax imposed by this section, see section 275(a)(6). (d) Administration and procedure (1) In general Any assessable payment provided by this section shall be paid upon notice and demand by the Secretary, and shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68. (2) Time for payment The Secretary may provide for the payment of any assessable payment provided by this section on an annual, monthly, or other peri- odic basis as the Secretary may prescribe. Page 3118 TITLE 26—INTERNAL REVENUE CODE [§ 4980I (3) Coordination with credits, etc. The Secretary shall prescribe rules, regula- tions, or guidance for the repayment of any as- sessable payment (including interest) if such payment is based on the allowance or payment of an applicable premium tax credit or cost- sharing reduction with respect to an em- ployee, such allowance or payment is subse- quently disallowed, and the assessable pay- ment would not have been required to be made but for such allowance or payment. (4) Time for response The Secretary shall allow an applicable large employer at least 90 days from the date of the first letter which informs the employer of a proposed assessment of the employer shared responsibility payment under this sec- tion to respond to the proposed assessment be- fore taking any further action with respect to such proposed assessment. (Added and amended Pub. L. 111–148, title I, § 1513(a), title X, §§ 10106(e)–(f)(2), 10108(i)(1)(A), Mar. 23, 2010, 124 Stat. 253, 910, 914; Pub. L. 111–152, title I, § 1003, Mar. 30, 2010, 124 Stat. 1033; Pub. L. 112–10, div. B, title VIII, § 1858(b)(4), Apr. 15, 2011, 125 Stat. 169; Pub. L. 114–41, title IV, § 4007(a)(1), July 31, 2015, 129 Stat. 465; Pub. L. 115–141, div. U, title IV, § 401(a)(2)(B), Mar. 23, 2018, 132 Stat. 1184; Pub. L. 118–168, § 4(a), Dec. 23, 2024, 138 Stat. 2587.) Editorial Notes REFERENCES IN TEXT The Patient Protection and Affordable Care Act, re- ferred to in subsecs. (a)(2), (b)(1)(B), and (c)(3)(B), (C), (5)(A)(ii), (6), is Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 119. Sections 1302(c)(4), 1402, 1411, and 1412 of the Act are classified to sections 18022(c)(4), 18071, 18081, and 18082, respectively, of Title 42, The Public Health and Wel- fare. Section 10108 of the Act enacted former section 139D of this title and section 18101 of Title 42, amended sections 36B, 162, 4980H, 6056, and 6724 of this title and section 218b of Title 29, Labor, and enacted provisions set out as notes under sections 36B, 162, 4980H, and 6056 of this title and former section 139D of this title. For complete classification of this Act to the Code, see Short Title note set out under section 18001 of Title 42 and Tables. AMENDMENTS 2024—Subsec. (d)(4). Pub. L. 118–168 added par. (4). 2018—Subsec. (c)(2)(F). Pub. L. 115–141 substituted ‘‘Department of Veterans Affairs’’ for ‘‘Veterans Ad- ministration’’ in heading. 2015—Subsec. (c)(2)(F). Pub. L. 114–41 added subpar. (F). 2011—Subsec. (b)(3). Pub. L. 112–10 struck out par. (3). Text read as follows: ‘‘No assessable payment shall be imposed under paragraph (1) for any month with re- spect to any employee to whom the employer provides a free choice voucher under section 10108 of the Patient Protection and Affordable Care Act for such month.’’ 2010—Subsec. (b). Pub. L. 111–152, § 1003(d), redesig- nated subsec. (c) as (b) and struck out former subsec. (b) which related to large employers with enrollment waiting periods exceeding 60 days. Pub. L. 111–148, § 10106(e), amended subsec. (b) gen- erally. Prior to amendment, subsec. (b) related to large employers with enrollment waiting periods exceeding 30 days. Subsec. (c). Pub. L. 111–152, § 1003(d), redesignated sub- sec. (d) as (c). Former subsec. (c) redesignated (b). Subsec. (c)(1). Pub. L. 111–152, § 1003(b)(1), substituted ‘‘an amount equal to 1⁄12 of $3,000’’ for ‘‘400 percent of the applicable payment amount’’ in concluding provi- sions. Subsec. (c)(3). Pub. L. 111–148, § 10108(i)(1)(A), added par. (3). Subsec. (d). Pub. L. 111–152, § 1003(d), redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c). Subsec. (d)(1). Pub. L. 111–152, § 1003(b)(2), substituted ‘‘$2,000’’ for ‘‘$750’’. Subsec. (d)(2)(D). Pub. L. 111–152, § 1003(a), amended subpar. (D) generally. Prior to amendment, text read as follows: ‘‘In the case of any employer the substantial annual gross receipts of which are attributable to the construction industry— ‘‘(i) subparagraph (A) shall be applied by sub- stituting ‘who employed an average of at least 5 full- time employees on business days during the pre- ceding calendar year and whose annual payroll ex- penses exceed $250,000 for such preceding calendar year’ for ‘who employed an average of at least 50 full- time employees on business days during the pre- ceding calendar year’, and ‘‘(ii) subparagraph (B) shall be applied by sub- stituting ‘5’ for ‘50’.’’ Pub. L. 111–148, § 10106(f)(2), added subpar. (D). Subsec. (d)(2)(E). Pub. L. 111–152, § 1003(c), added sub- par. (E). Subsec. (d)(4)(A). Pub. L. 111–148, § 10106(f)(1), inserted ‘‘, with respect to any month,’’ after ‘‘means’’. Subsec. (d)(5)(A). Pub. L. 111–152, § 1003(b)(3), sub- stituted ‘‘subsection (b) and paragraph (1)’’ for ‘‘sub- section (b)(2) and (d)(1)’’ in introductory provisions. Subsec. (e). Pub. L. 111–152, § 1003(d), redesignated sub- sec. (e) as (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2024 AMENDMENT Pub. L. 118–168, § 4(b), Dec. 23, 2024, 138 Stat. 2587, pro- vided that: ‘‘The amendment made by this section [amending this section] shall apply to assessments pro- posed in taxable years beginning after the date of the enactment of this Act [Dec. 23, 2024].’’ EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–41, title IV, § 4007(a)(2), July 31, 2015, 129 Stat. 466, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to months beginning after December 31, 2013.’’ EFFECTIVE DATE OF 2011 AMENDMENT Amendment by Pub. L. 112–10 effective as if included in the provisions of, and the amendments made by, the provisions of Pub. L. 111–148 to which it relates, see sec- tion 1858(d) of Pub. L. 112–10, set out as a note under section 36B of this title. EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–148, title X, § 10106(f)(3), Mar. 23, 2010, 124 Stat. 911, provided that: ‘‘The amendment made by paragraph (2) [amending this section] shall apply to months beginning after December 31, 2013.’’ Pub. L. 111–148, title X, § 10108(i)(1)(B), Mar. 23, 2010, 124 Stat. 914, provided that: ‘‘The amendment made by this paragraph [amending this section] shall apply to months beginning after December 31, 2013.’’ EFFECTIVE DATE Pub. L. 111–148, title I, § 1513(d), Mar. 23, 2010, 124 Stat. 256, provided that: ‘‘The amendments made by this sec- tion [enacting this section] shall apply to months be- ginning after December 31, 2013.’’ [§ 4980I. Repealed. Pub. L. 116–94, div. N, title I, § 503(a), Dec. 20, 2019, 133 Stat. 3119] Section, added and amended Pub. L. 111–148, title IX, § 9001(a), title X, § 10901(a), (b), Mar. 23, 2010, 124 Stat. 847, 1015, 1016; Pub. L. 111–152, title I, § 1401(a), Mar. 30,