Last reviewed October 2026

Do employees with TRICARE or VA coverage count toward the 50 employees for the ACA employer mandate?

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Short answer: Not for that month. Solely to decide whether an employer is an applicable large employer, an employee with TRICARE or VA health coverage for a month is left out of the count for that month.

IRC 4980H(c)(2)(F) says that, solely for determining whether an employer is an applicable large employer (ALE) for any month, an individual is not counted as an employee for a month in which they have medical coverage under TRICARE (chapter 55 of title 10) or a VA health care program.

This matters for employers near 50 full-time employees plus full-time equivalents with many veterans or military retirees on staff. Keep monthly records of which employees had TRICARE or VA coverage.

The exclusion is narrow. It does not apply to the market-rule count that decides small versus large group, to COBRA’s 20-employee test, or to the offer itself: an ALE must still offer coverage to these employees if they are full time.

Sources

26 U.S.C. 4980H(c)(2)(F)law.cornell.edu/uscode/text/26/4980H29 U.S.C. 1161(b), Cornell LIIlaw.cornell.edu/uscode/text/29/1161

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History: Originally published October 27, 2026 ยท Last reviewed October 27, 2026