Businesses subject to the Affordable Care Act’s “shared responsibility” provision must consider proper worker classification and its implications.

Although the Patient Protection and Affordable Care Act, as amended (ACA) was enacted to expand health insurance coverage in the United States, particular aspects of the ACA depend on whether someone is an “employee.” Because the ACA links the number of employees a business has to its coverage responsibilities and penalties, the ACA focuses new attention on, and further complicates, the already tricky area of law governing the definition of “employee” and the proper classification of workers as either employees or independent contractors. This list highlights the ACA’s requirements, the standards expected to apply in determining the number of employees for that purpose, the broader implications of proper worker classification and the serious risks of misclassification, as well as various existing remedial programs and guidelines for helping ensure workers are properly classified.

The ACA’s “shared responsibility” provision requires that a “large employer” provide health coverage to its full-­time employees and their dependents. Any “large employer” that fails to provide adequate and affordable health insurance will face penalties based on the number of its full-­time “employees.” Additionally, related data collection and reporting requirements also only relate to “employees.” Therefore, every business needs to understand which of its workers qualify as “employees” (1) to determine whether it is a “large employer” under the ACA and (2) if it is a “large employer,” to calculate any potential penalty.