individual116 and employer mandates.117 The “Individual Shared
Responsibility” provision requires individuals to have coverage that
provides at least the “minimum essential coverage” the ACA prescribes,
and imposes a tax penalty if they do not.118 Likewise, employers of fifty or
more full-time equivalent (“FTE”) employees must provide coverage that
meets the law’s requirements or pay a penalty, which the ACA
euphemistically terms an “Employer Shared Responsibility (“ESR”) fee.”119
These penalties are meant to induce individuals and employers to do the
right thing and, to a limited extent, to provide funds to the government to
help defray the additional expenses it will incur providing needed care to
uninsured or underinsured individuals.120 However, the penalties are set
well below the cost of the insurance that the mandate requires.121 Thus, in
many cases, it would cost less for an employer to violate the mandate and
pay the penalty than to comply with it.122 This statement, however, takes
account only of the dollars directly expended under each alternative; it
doesn’t consider what might be very substantial costs in terms of employer-
116. 26 U.S. C. A. §5000A (West, WestlawNext current through P.L. 113-296
(excluding P.L. 113-235, 113-287, 113-291, and 113-295)) (2010); see Individual Shared
Responsibility Provision – Minimum Essential Coverage, INTERNAL REVENUE SERV.,
http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Minimum-Essential-Coverage (last updated Mar. 13, 2015).
117. 26 U.S. C. A. §4980H (West, WestlawNext current through P.L. 113-296
(excluding P.L. 113-235, 113-287, 113-291, and 113-295)) (2010); see Employer Shared
Responsibility Provisions, INTERNAL REVENUE SERV., http://www.irs.gov/Affordable-Care-Act/Employers/Employer-Shared-Responsibility-Provisions (last updated Feb. 18, 2015).
Note that although both the individual and employer responsibility provisions are widely
referred to as “mandates,” as reflected in many of the articles hereinafter cited, the ACA
does not use that word and the law’s requirements are structured so as to not be absolutely
prescriptive. Therefore, as explained below, it would be more precise to speak of the
provisions as strong incentives rather than “mandates.” See generally Fitzgerald, note 121
118. 26 U.S. C. A. §5000A (2010). See Annie L. Mach, INDIVIDUAL MANDATE UNDER
ACA (Cong. Research Service Report R41331, Aug. 12, 2014) available at https://
www.fas.org/sgp/crs/misc/R41331.pdf. The penalty starts low but increases between 2014
and 2016 and is indexed to inflation thereafter. Id. at 1-4.
119. Employer Mandate, U.S. CHAMBER OF COM., https://www.uschamber.com/health-reform/employer-mandate (last visited Mar.19, 2015).
120. Bob Semro, The Role of the ‘Employer Mandate’ in the Affordable Care Act,
HUFFPOST DENVER (July 12, 2013), http://www.huffingtonpost.com/bob-semro/the-role-of-
121. See Beth Fitzgerald, Employers Could Opt to Pay ACA Penalty Rather than
Provide Mandated Coverage, NJBIZ (Nov. 26, 2014), http://www.njbiz.com/
than-provide-mandated-coverage; See also CIGNA, EMPLOYER MANDATE FACT SHEET 3
(2014), available at http://www.cigna.com/assets/docs/about-cigna/informed-on-reform/
employer-mandate-fact-sheet.pdf (listing the penalties applied to employers).
122. Fitzgerald, supra note 121.