The IRS has introduced 2024 indexing changes to the relevant greenback quantity used to calculate employer shared accountability funds below the Inexpensive Care Act. As background, relevant giant employers (ALEs) could also be chargeable for an employer shared accountability penalty below Code § 4980H(a) in the event that they fail to supply minimal important protection to a enough variety of full-time workers. Alternatively, ALEs could also be topic to a Code § 4980H(b) penalty if they provide minimal important protection to the required variety of full-time workers, however the provided protection isn’t reasonably priced or doesn’t present minimal worth. The adjusted penalty quantity per full-time worker for failures occurring within the 2024 calendar 12 months will probably be $2,970 below Code § 4980H(a) (a $90 enhance from 2023) and $4,460 below Code § 4980H(b) (a $140 enhance from 2023). (Present and former penalty quantities can be found on an IRS Q/A web page.)

EBIA Remark: As a reminder, the IRS makes use of Letter 226-J to tell ALEs of their potential legal responsibility below Code § 4980H (see our Checkpoint article). A response kind (Kind 14764), usually due inside 30 days, is included with Letter 226-J in order that an ALE can inform the IRS whether or not it agrees with the proposed penalty. Employers and their advisors ought to be looking out for this letter in order that they’re ready to promptly evaluation and reply. For extra data, see EBIA’s Well being Care Reform guide at Part XXVIII (“Shared Accountability for Employers (Play or Pay Penalty Tax)”). See additionally EBIA’s Kind 1094/1095 Workbook at Part XV (“Penalty Evaluation”).

Contributing Editors: EBIA Workers.