Washington 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 Washington agency has 35 caregivers and office staff at 130+ hours a month, plus 48 part-time caregivers averaging 45 hours a month.

• Full-time employees: 35
• Part-time FTEs: 48 × 45 = 2,160 hours ÷ 120 = 18
• Total: 53 → 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 WA Healthplanfinder, you owe $3,340 per full-time employee minus the first 30. In the example above: (35 − 30) × $3,340 = $16,700 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 Washington 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:

Washington expanded Medicaid (Apple Health); adults to 138% FPL qualify. kff.org ↗

Washington runs its own exchange, Washington Healthplanfinder, including Cascade Care Savings state subsidies and public-option plans. wahealthplanfinder.org ↗

What counts as "affordable" for a Washington 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 Washington-specific point: because the state minimum wage is $17.13, the rate-of-pay safe harbor gives Washington agencies far more room than the $129.89 FPL figure most national guides quote. An agency paying $17.13 can charge up to $221.80 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 WA Healthplanfinder 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 Washington wage & hour page

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

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

Other Washington mandates that touch home care agencies

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

• WA Paid Family & Medical Leave. WA PFML provides up to 12 weeks family + medical (16-18 combined in some cases), funded by a payroll premium split between workers and employers; employers with fewer than 50 employees are exempt from the employer share but must still collect and remit employee premiums. paidleave.wa.gov ↗
• WA Cares Fund (LTC payroll premium). The WA Cares Fund charges a 0.58% employee payroll premium for state long-term-care benefits (up to $36,500 lifetime, indexed) - doubly relevant to home care agencies as both employers and future service providers under the benefit. wacaresfund.wa.gov ↗
• WA Saves (2027). Washington Saves, the state auto-IRA for employers without retirement plans, begins phased employer registration July 1, 2027 - no action required in 2026. 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 Washington require us to file anything about health coverage with the state?

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

We pay the Washington minimum of $17.13. What's the most we can charge for self-only coverage?

Under the rate-of-pay safe harbor, $17.13 × 130 hours × 9.96% = $221.80 a month in 2026. That's well above the $129.89 FPL figure, so rate of pay is the better harbor for Washington agencies.

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

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 WA Healthplanfinder 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.