November 7, 2017 Associated Payroll

ACA Penalty Updates

Under the ACA, a large employer must offer “affordable” medical coverage to at least 95%of its full-time employees and their dependent children, age 26 or younger or face stiff penalties.

  • A penalty of $2,260 per full-time employee (minus the first 30) if the employer fails to offer minimum essential coverage to 95 percent of its full-time employees and their dependents and any full-time employee obtains coverage on the exchange.
  • A penalty of $3,390 per full-time employee (minus the first 30) if a full-time employee receives a premium tax credit because the employer offered coverage that was unaffordable or did not provide minimum value.

These penalties, which took effect Jan. 1, 2016, go up in 2018 to $2,320 for the first penalty and $3,480 for the second. An employer may be subject to one of these penalties, not both. Employers that previously defined a full-time employee based on 40 hours of service have had to adjust their definition of full-time to 30 hours to comply with the employer mandate.

GET IN TOUCH

We are here to help! Whether you need access to information on service offerings, or if you’re looking for general information about the payroll industry and related services, we're here for you.