The IRS has announced indexed penalties for applicable large employers (ALEs) for 2024. Below we provide the penalties for 2022, 2023, and 2024.
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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)
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| §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
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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.