Update to 2024 Employer Shared Responsibility Payment (Employer Mandate Penalty) Amount
Employee Benefits
Update to 2024 Employer Shared Responsibility Payment (Employer Mandate Penalty) Amount
Penalty for Failure to Offer Substantially All Full-Time Employees Coverage
The first penalty under the Employer Mandate is triggered when an Applicable Large Employer (ALE) fails to offer “substantially all” of their fulltime employees (defined as at least 95% of full-time employees) Minimum Essential Coverage (MEC) and at least one full-time employee goes to the Exchange/ Marketplace and receives a premium tax credit.
The IRS recently released an annual inflationary adjustment to this penalty amount for the 2024 calendar year (see Rev. Proc. 2023-17).
The annual penalty amount associated with an Applicable Large Employer that fails to offer MEC to substantially all its full-time employees (and at least one full-time employee receives a premium tax credit) is $2,970 (or $247.50 per month) per full-time employee, minus the first 30 full-time employees.
Penalty for Failure to Offer Affordable and Minimum Value Coverage to a Full-Time Employee
If an ALE offers “substantially all” of its full-time employees MEC, an ALE could still be subject to penalties for failing to offer affordable and Minimum Value coverage to any full-time employee that receives a premium tax credit to purchase coverage in the Exchange/Marketplace.
The IRS recently released an annual inflationary adjustment to this penalty amount for the 2024 calendar year (see Rev. Proc. 2023-17).
The annual penalty amount associated with an Applicable Large Employer that fails to offer affordable and Minimum Value coverage to a full-time employee and that full-time employee receives a premium tax credit to purchase coverage in the Exchange/Marketplace is $4,460 (or $371.66 per month) per full-time employee for each fulltime employee that receives a premium tax credit.
