ACA compliance for employers in construction

The Affordable Care Act (ACA) requires qualifying employers to offer health insurance to their full-time workers. That insurance must meet certain affordability and minimum value standards.

For construction employers, keeping up with ACA compliance is a year-round job. Crews change frequently based on the season and project load. And compliance affects every corner of the business, from hiring to federal tax reporting. Employers need to diligently track full-time status throughout the year, provide clear benefits packages to workers, and keep accurate records for tax time.

This guide explains ACA compliance for employers. It covers how to determine which rules apply, how reporting works, and what happens when a contractor misses a requirement.

What is ACA compliance for employers?

Compliance means following all obligations under the ACA’s Employer Shared Responsibility Provisions (ESRP) and IRS reporting rules. Contractors must:

• Determine worker eligibility for health insurance
• Offer minimum essential coverage for full-time employees
• Complete annual tax filings

Who must comply with the ACA, and what are their obligations?

Different ACA rules apply to companies of varying sizes, depending on whether they qualify as an Applicable Large Employer (ALE). To determine their ACA obligations, construction employers must review the following requirements.

Applicable Large Employer (ALE) status

A contractor is defined as an ALE when the prior calendar year shows an average of 50 or more full-time and full-time equivalent (FTE) employees. FTE is used to convert the hours worked by part-time and seasonal workers into an equivalent number of full-time workers.

Determining employer ACA eligibility

Eligibility calculations require accurate and consistent time tracking. Full-time employees must work at least 30 hours per week or 130 hours per month. Part-time hours convert into FTE counts by adding up the monthly hours of every employee who is not full-time, capping each one at 120, and dividing the total by 120. 

For example, a framing contractor might employ 45 full-time carpenters and 20 part-time employees who each work 60 hours a month. The part-time employees provide a total of 1,200 working hours. Divided by 120, they equate to 10 FTEs. That brings the count to 55, so the employer meets ALE status under the ACA and must comply.

Affordability and minimum value standards

ALEs must offer health coverage that meets affordability and minimum value standards for at least 95% of their full-time employees:

• Affordability: The IRS sets an annual percentage that limits how much an employer can charge an employee for the lowest-cost self-only plan. Because employers don’t track household incomes of their employees, they rely on IRS safe harbors tied to W-2 wages, rate-of-pay calculations, or federal poverty guidelines. 
• Minimum value: Plans must cover at least 60% of expected medical costs. A construction employer offering a plan that fails to meet this threshold would violate minimum value rules and trigger potential penalties.

Employee notification requirements

Employers must provide employees with a Summary of Benefits and Coverage, which explains plan features in a standardized format. The Department of Labor (DOL) also requires employers to provide workers with a Marketplace notice within 14 days of hire. This informs new hires about their health coverage options through the Marketplace.

Union workers and multiemployer plans

Contractors can sign a collective bargaining agreement (CBA) with a union and pay into a multiemployer union health and welfare fund on behalf of their workers. This satisfies their legal obligation to offer health coverage under the ACA. The contractor won’t pay penalties as long as the union contract requires those health contributions. 

When filling out Form 1095-C for union workers, the contractor uses a specific code to tell the IRS that a union multiemployer arrangement covers those employees. Contractors working with union CBAs must track these codes separately from nonunion employees.

ACA reporting requirements for construction employers

Strict reporting requirements apply to all ALEs and include the following annual submissions.

Form 1095-C (Employee statement)

Form 1095-C reports coverage offers, enrollment, and affordability information for each full-time employee. Employers must furnish this form to employees each year. Construction firms with rotating crews also have to ensure accurate coding for employees who shift between full-time and variable-hour status.

Form 1094-C (Employer summary)

Form 1094-C serves as the employer’s summary filing. It aggregates workforce counts, coverage offers, and full-time totals. This form also confirms whether the employer met the 95% offer requirement. It also shows whether any employees received a Premium Tax Credit (PTC) from the Marketplace to help pay for their insurance, which could expose the employer to penalties.

Filing deadlines and methods

The IRS sets deadlines for both forms annually, and due dates differ for paper and electronic filing. Electronic filing applies to most contractors because the threshold for mandatory electronic submission (10 returns) sits far below typical construction workforce sizes.

Employers should confirm the IRS’s current-year tax calendar because deadlines change annually, but here’s a standard general timeline:

• Furnishing 1095-C to full-time employees: Typically early March of the year following the reporting tax year
• Paper filing with the IRS (for qualifying employers filing 10 or fewer returns): Late February
• Electronic filing with the IRS: Late March

ACA penalties for noncompliance in construction

Contractors who miss ACA requirements may face the following penalties under Section 4980H, Section 6721, and Section 6722.

Penalty for not offering coverage (4980H(a))

This penalty applies when an ALE fails to offer minimum essential coverage to at least 95% of full-time employees and at least one worker receives a PTC on the Marketplace. For 2027, the penalty will be $3,780 per full-time employee annually, excluding the first 30 employees. Penalties adjust each year.

Penalty for unaffordable or insufficient coverage (4980H(b))

This applies when an ALE offers coverage, but it fails to meet affordability or minimum value standards. For 2027, the penalty will be $5,670 per subsidized employee annually. Construction employers offering plans with high employee premiums or limited benefits risk incurring this penalty.

Penalties for late or inaccurate reporting (6721 and 6722)

The IRS applies tiered penalties when an employer files late, submits incorrect information, or fails to furnish forms to employees. Penalties adjust annually and increase based on how long the error remains uncorrected. Here are the 2026 penalties:

• Corrected within 30 days: Lowest penalty tier ($60)
• Corrected after 30 days but before August 1st: Mid-range penalty tier ($130)
• Corrected after August 1st: Higher penalty tier ($340)
• Intentional disregard: $680 per return, with no annual cap

Manage ACA compliance with Miter

In construction, employers often hire seasonally and cross the ALE threshold throughout the year, which makes diligent workforce tracking nonnegotiable. Miter Benefits Administration supports eligibility tracking, coverage offer management, and accurate filings by monitoring full-time status and generating all required ACA forms. Eligibility runs on look-back measurement periods, so a carpenter who works 50 hour weeks through a summer push and drops off in February gets measured across the whole period instead of month to month.

Frequently asked questions

What is ACA reporting?

ACA reporting refers to the annual filings that show whether an employer offered minimum essential coverage to their full-time employees. Required filings include Form 1095-C for each employee and Form 1094-C, which acts as the employer summary. Both forms help the IRS verify compliance with the ACA and determine eligibility for a Marketplace tax credit.

When is ACA reporting due?

The IRS sets annual deadlines for furnishing Form 1095-C to employees and filing Form 1094-C. Paper and electronic deadlines differ, so employers must confirm current-year dates directly through the IRS tax calendar.

What happens if an employer receives an ACA penalty notice?

The IRS issues Letter 226J when it believes an employer owes an ACA penalty, which outlines the proposed assessment and designates a response window. Employers must review the codes, confirm eligibility calculations, and submit a timely reply with supporting documentation.