“Pay or Play” Penalties For 2015 and 2016

December 22, 2015 Robert Sheen Affordable Care Act, Applicable Large Employer (ALE), IRS, Penalties

The IRS has announced the 2015 and 2016 “pay or play” penalties, adjusted for inflation, that may be imposed on employers who fail to comply with the Affordable Care Act’s employer mandates.

When passed in 2010, the ACA provided for a $2,000 penalty if an applicable large employer fails to offer all full-time employees health insurance with minimum essential coverage, and a $3,000 penalty for failing to offer these employees coverage that is affordable and meets standards for minimum value. Both amounts are adjusted annually for inflation after 2014.

The agency said the 2015 penalty for failing to offer coverage to substantially all full-time employees will be $2,080, or $173.33 per month, multiplied by the total number of employees minus 80.

The penalty for not providing affordable minimum-value coverage in 2015 will increase to $3,120, or $260 per month, for each full-time employee who obtains individual coverage through a government exchange and receives a premium subsidy.

For 2016, the IRS said, the penalties will rise to $2,160, or $180 per month, multiplied by the total number of employees minus 30, and $3,240, respectively.

To learn more about ACA compliance in 2021, click here.