Potential Penalties

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Applicable employers could be assessed one of the following penalties for non-compliance with Employer Shared Responsibility provisions, depending on which circumstance applies:

  1. If an applicable large employer with 50 or more full-time employees (who doesn’t qualify for transition relief) does not offer minimum essential coverage (MEC) to at least 70 percent of its full-time employees and their dependents in 2015, and at least one full-time employee receives a premium tax credit through a health insurance exchange, the employer may be assessed an annual penalty of $2,160 per full-time employee above the first 30 full-time employees.
  2. If an applicable large employer with 50 or more full-time employees (who doesn’t qualify for transition relief) does offer MEC to at least 70 percent of its full-time employees and their dependents in 2015, but at least one of the full-time employees obtains a premium tax credit through a health insurance exchange, the employer may be subject to a penalty of $3,240 for each non-covered full-time employee who receives a premium tax credit. However, the penalty cannot exceed the penalty that would be assessed for not offering any health coverage.
  3. If an applicable large employer with 50 or more full-time employees (who doesn’t qualify for transition relief) offers health coverage in 2015 that provides MEC but it is determined to be either: 1) unaffordable or 2) doesn't meet the minimum value and at least one full-time employee whose coverage was deemed to be unaffordable or lacked minimum value receives a premium tax credit through a health insurance exchange, then the employer may be fined $3,240 for each employee in that circumstance receiving a premium tax credit. The penalty cannot exceed the penalty that would be assessed for not offering any health coverage.

In addition, Applicable Large Employers can be assessed penalties for not filing Forms 1094-C and 1095-C on time. Penalties for not filing these forms (or filing incomplete or incorrect forms) are as follows:

ESR Reporting Penalties

Penalty

Amount

Failure to file/furnish an annual IRS return or provide individual statements to all full-time employees

$260

Annual cap on penalties

$3,178,500

Failure to file/furnish when corrected within 30 days of the required filing date

$50

Annual cap on penalties when corrected within 30 days of required filing date

$529,500

Failure to file/furnish when corrected by August 1 of the year in which the required filing date occurs

$100

Cap on penalties when corrected by August 1 of the year in which the required filing date occurs

$1,589,000

Lesser cap for entities with gross receipts of not more than $5,000,000

$1,059,000

Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected within 30 days of required filing date

$185,000

Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected by August 1 of the year in which the required filing date occurs

$529,000

Penalty per filing in case of intentional disregard—no cap applies in this case

$520