The IRS Announces Adjusted ACA "Pay or Play" Penalty Amounts for 2021
The IRS has recently announced new penalty amounts under Section 4980H of the ACA. As a reminder, Section 4980H has two penalties for violators of the ACA who refuse to offer affordable health insurance to their employees.
-Section 4980H(a)- the per-employee penalty (minus 30) for failure to provide health insurance to “substantially all” employees- has been increased to $2700.
-Section 4980H(b)- the penalty for not providing affordable/minimum value health insurance, assessed for each employee who goes on the individual market with a health insurance subsidy-is $4060.
These increases are standard annual penalty hikes, and employers should take these values into account when making health insurance decisions in 2021.