Firms with fewer than 50 full-time (or full-time equivalent) employees are exempt from the Affordable Care Act’s employer mandate – meaning they are not subject to penalties under the ACA for not offering employees health insurance. Nonetheless, small firms should become familiar with other key provisions of the ACA, such as the Small Business Tax Credit. This credit is available to businesses with fewer than 25 full-time equivalent employees who pay average annual wages below $50,000 (indexed for inflation) and contribute at least 50% of each participating employee’s health insurance premiums. The credit can be worth up to half of the employer’s annual premium costs. Small businesses are also eligible to participate in the Small Business Health Options Program (“SHOP”), a marketplace designed to provide cost-effective coverage options to small employers.