The 5 Most Common Penalties in the Affordable Care Act
The coverage requirements and reporting deadlines required by the Affordable Care Act (ACA) are constantly changing. The following summarization offers a refresher on the most common ACA fines that both employers and employees should be aware of.
Delivering forms late to employees Employers must provide employees, by January of each year, with Health Coverage Forms 1095-B (establishing that an individual has minimum essential health coverage and is therefore not liable for the individual shared responsibility payment) or 1095-C (establishing that an individual is employed by an Applicable Large Employer which is subject to the ACA’s employer shared responsibility provision) as applicable. If employers miss the deadline for fewer than 30 days, the penalty is $50 per form. After 30 days, the penalty raises to $250 per form. Form filing late to the IRS ACA Employer Reporting Forms are due by the end of February if filing by paper, and by the end of March if filing electronically. Employers who miss these deadlines will be penalized $250 per form.
Individual Mandate Penalty This penalty only affects employees, but it’s nevertheless wise for dealers to know the specifics, in case their staffs ask about it. When a person files their taxes, they must indicate if they have maintained minimum essential coverage all year. If they can afford health insurance but they choose not to pay for it, they must then pay the individual shared responsibility fee. If, after checking with the employer or the insurance carrier, the IRS determines that an individual was subject to the individual shared responsibility fee but failed to pay it, a penalty letter will be issued.
Jim Rochel, Senior Sales Representative, Professional Group Plans, contributed to this article.
Failure to offer compliant coverage
‘A’ penalties If the employer fails to offer coverage that is compliant with the federal law, and an employee goes to the state or federal health insurance exchange to get a subsidy, the employer must pay a penalty of $2,160 for every full-timer they employ in excess of 30
full-time employees. ‘B’ penalties
If an employee goes to the exchange, gets a subsidy, and the insurance offered by the company was not affordable (or met minimum value), the employer is penalized $3,240 for each employee who got the subsidy from the exchange.
Is Your Dealership ACA Compliant? The GNYADA Insurance Brokerage can evaluate your current health plan, to help assure that it meets all requirements of the Affordable Care Act. Just call 718.746.8100 or email email@example.com.
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