Montana Home Care Agencies and the ACA Employer Mandate: Who Has to Offer Coverage

Is your agency an Applicable Large Employer?

Count full-time employees (30+ hours a week or 130+ a month) and add full-time equivalents from everyone else: total part-time hours in the month ÷ 120. Average the monthly totals over the prior calendar year.

Worked example. A Montana agency has 45 caregivers and office staff at 130+ hours a month, plus 30 part-time caregivers averaging 60 hours a month.

• Full-time employees: 45
• Part-time FTEs: 30 × 60 = 1,800 hours ÷ 120 = 15
• Total: 60 → the agency is an ALE.

Two home care specifics. Entities under common ownership are combined under the controlled-group rules, so multiple agency LLCs or franchise territories with the same owners count as one employer. And caregivers with variable hours can be classified using the IRS look-back measurement method (a 3–12 month measurement period followed by a stability period), which is how most agencies decide who must be offered coverage without re-running the math every month.

IRS, Identifying full-time employees ↗

What an ALE owes if it doesn't comply (2026 amounts)

• 4980H(a), no offer: if you don't offer minimum essential coverage to at least 95% of full-time employees and any one of them gets a subsidy on HealthCare.gov, you owe $3,340 per full-time employee minus the first 30. In the example above: (45 − 30) × $3,340 = $50,100 a year, triggered by a single subsidized caregiver.
• 4980H(b), unaffordable offer: if you offer coverage that's unaffordable or below minimum value, you owe $5,010 for each full-time employee who enrolls in a subsidized marketplace plan.

IRS Rev. Proc. 2025-26 ↗

Which Montana caregivers can actually trigger a penalty

Penalties are only triggered when a full-time employee actually receives a premium tax credit on the marketplace. Who can get one depends on income:

Montana expanded Medicaid and its 2025 legislature reauthorized the program, removing the prior sunset; adults to 138% FPL qualify. kff.org ↗

Montana uses the federal marketplace, HealthCare.gov. healthcare.gov ↗

What counts as "affordable" for a Montana caregiver in 2026

Coverage is affordable if the caregiver's self-only contribution is no more than 9.96% of household income. Since you can't know household income, the IRS provides three safe harbors:

The Montana-specific point: because the state minimum wage is $10.85, the rate-of-pay safe harbor gives Montana agencies more room than the $129.89 FPL figure most national guides quote. An agency paying $10.85 can charge up to $140.49 a month for self-only coverage and still be safe from the (b) penalty. Use each caregiver's actual lowest hourly rate; where local minimums are higher, the ceiling is higher still.

A CHOICE (formerly known as ICHRA) counts as an offer of coverage. It's affordable if the caregiver's cost for the lowest-cost self-only silver plan on HealthCare.gov for their rating area, minus your monthly allowance, stays within the 9.96% test.

IRS Rev. Proc. 2025-25 ↗ · IRS HRAs ↗ · minimum wage → see the Montana wage & hour page

2026 federal compliance calendar (Montana adds nothing to this list)

There is no Montana filing, no Montana furnishing deadline, and no Montana penalty. If you also employ caregivers who live in California, New Jersey, Massachusetts, Rhode Island, or DC under a self-insured plan, those states' reporting rules may apply to those employees; see the state-by-state ACA hub.

IRS, Information reporting by ALEs ↗

What Montana does not require

Montana has no state individual mandate or 1095 reporting, no auto-IRA program, and no paid family leave program. cri.georgetown.edu ↗

Frequently asked questions

We have 48 full-time caregivers and a handful of part-timers. Are we under the threshold?

Probably not. Add the part-timers' monthly hours and divide by 120. Two part-timers at 120 hours a month between them add one FTE, which puts you at 49; a third pushes you to 50 and ALE status the following year.

Does Montana require us to file anything about health coverage with the state?

No. Montana has no state individual mandate and no state 1095 reporting. Your only filing is federal (1094-C/1095-C) if you're an ALE.

Can a caregiver on Medicaid trigger a penalty against us?

No. Penalties are triggered only by full-time employees who receive a marketplace premium tax credit. Montana caregivers below 138% FPL qualify for Medicaid instead, so they can't trigger 4980H. Caregivers between 138% and 400% FPL can.

We pay the Montana minimum of $10.85. What's the most we can charge for self-only coverage?

Under the rate-of-pay safe harbor, $10.85 × 130 hours × 9.96% = $140.49 a month in 2026. That's above the $129.89 FPL figure, so rate of pay is the better harbor for Montana agencies.

Does a CHOICE (ICHRA) count as offering coverage in Montana?

Yes. An affordable CHOICE (ICHRA) satisfies both the 4980H(a) offer requirement and the (b) affordability test, measured against the lowest-cost silver plan on HealthCare.gov for each caregiver's rating area.

We're under 50 FTEs. Is there any reason to offer coverage?

No mandate applies, but agencies under 50 commonly offer a MEC or CHOICE (ICHRA) to reduce turnover, and the same affordability math determines what you can charge caregivers.