Applicable large employers that do not offer minimum essential coverage to substantially all (70% in 2015 and 95% in 2016) of their full-time employees may be subject to a penalty under IRC Sec. 4980H(a), if at least one employee enrolls in individual coverage through a state insurance marketplace and receives a premium tax credit or cost-sharing subsidy. Employers that offer minimum essential coverage that is unaffordable and/or does not meet certain minimum value requirements may be subject to a penalty under IRC Sec. 4980H(b) if an employee receives a premium tax credit or cost-sharing subsidy. In its monthly Payroll Industry conference call, the IRS projected the annual per-employee Section 4980H(a) penalty to be $2,080 for 2015 and $2,160 for 2016 and the annual per-employee Section 4980H(b) penalty to be $3,120 for 2015 and $3,240 for 2016.
There are a wide range of penalties surrounding the Affordable Care Act, and it is important you understand what they entail in order to avoid them. The various market reforms and requirements are often difficult to track, especially since they are seemingly ever-changing. Check out an article we authored to learn more.
A change in insurance tax law that occurred on January 1, 2014 may make your business subject to many thousands of dollars in penalties. If your business utilizes an Employee Payment Plan, there are a couple different ways to deal with employee premiums and reimbursements. If your business is an S Corporation, Employee Payment Plans become extra tricky, as S Corp shareholders are often treated as partners. A Forbes article explains these complications in detail.