The IRS has announced indexed penalties for applicable large employers (ALEs) for 2024. Below we provide the penalties for 2022, 2023, and 2024.
2022
2023
2024
§4980H(a) penalty
When ALE fails to offer minimum essential coverage (MEC) to at least 95% of full-time employees (and their dependents to age 26), this penalty is applied to all full-time (less the employer’s allocable share of 30 employees) when just one full-time employee obtains public Exchange coverage with a tax credit
(for an ALE with fewer than 100 full-time, must offer MEC to all but five full-time employees to avoid this penalty)
$2,750/yr
(≈$229.17/mo)
$2,880/yr
($240.00/mo)
$2,970/yr
($247.50/mo)
§4980H(b) penalty
Triggered when a full-time employee without access to affordable coverage providing minimum value obtains public Exchange coverage with a tax credit
$4,120/yr
(≈$343.33/mo)
$4,320/yr
($360.00/mo)
$4,460/yr
(≈$371.67/mo)
Be sure to discuss with your IMA benefits team each year the way you determine whether you offer to 95% of full-time (and their dependents), minimum value, and affordability.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.
