Pennsylvania 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 Pennsylvania agency has 30 caregivers and office staff at 130+ hours a month, plus 60 part-time caregivers averaging 44 hours a month.

• Full-time employees: 30
• Part-time FTEs: 60 × 44 = 2,640 hours ÷ 120 = 22
• Total: 52 → 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 Pennie, you owe $3,340 per full-time employee minus the first 30. In the example above: (30 − 30) × $3,340 = $0 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 Pennsylvania 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:

Pennsylvania expanded Medicaid (Medical Assistance); caregivers up to 138% FPL qualify for Medicaid and cannot trigger 4980H penalties, while those above may claim tax credits on Pennie. kff.org ↗

Pennsylvania runs its own exchange, Pennie, with open enrollment November 1 - January 15; Pennie shoppers lost the enhanced federal subsidies in 2026, roughly doubling average subsidized premium payments. pennie.com ↗

What counts as "affordable" for a Pennsylvania 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 Pennsylvania-specific point: at Pennsylvania's $7.25 minimum, the rate-of-pay safe harbor is worse than the FPL figure. The crossover is about $10.03 an hour. If your lowest caregiver wage is below that, use the FPL safe harbor and price self-only coverage at or under $129.89 a month. Above it, rate of pay gives you more room. This is why low-cost MEC plans priced inside the FPL figure and CHOICE arrangements (formerly known as ICHRAs) are the two most common structures among agencies in low-minimum-wage states: either one blocks both the (a) and (b) penalties if set up correctly.

A CHOICE (ICHRA) counts as an offer of coverage. It's affordable if the caregiver's cost for the lowest-cost self-only silver plan on Pennie 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 Pennsylvania wage & hour page

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

There is no Pennsylvania filing, no Pennsylvania furnishing deadline, and no Pennsylvania 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 ↗

Pennsylvania continuation coverage (mini-COBRA)

Pennsylvania's mini-COBRA requires insured group plans of employers with 2-19 employees to offer 9 months of continuation coverage to employees covered for at least 3 months before termination. pa.gov ↗

Other Pennsylvania mandates that touch home care agencies

These aren't ACA rules, but they land on the same desk.

• Philadelphia note. Philadelphia's Domestic Worker Bill of Rights and paid sick leave ordinance add city-level obligations for home care employers in the city, separate from health benefits law. phila.gov ↗

For completeness: Pennsylvania has no auto-IRA mandate; the proposed Keystone Saves program has passed the House in prior sessions but has not been enacted, so agencies face no state retirement registration. cri.georgetown.edu ↗ Pennsylvania has no paid family leave insurance program (bills pending) and no state individual mandate or employer 1095 filing; only federal ACA reporting applies. dol.gov ↗

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

No. Pennsylvania 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. Pennsylvania caregivers below 138% FPL qualify for Medicaid instead, so they can't trigger 4980H. Caregivers between 138% and 400% FPL can.

We pay $9.50 an hour. What's the most we can charge for self-only coverage?

Use the FPL safe harbor: $129.89 a month in 2026. At $9.50 the rate-of-pay method only allows $123.01, so FPL is the better harbor until wages pass about $10.03.

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

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 Pennie 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.