The first penalty under the Employer Mandate is triggered when an Applicable Large Employer (ALE) fails to offer “substantially all” of their fulltime employees (defined as at least 95% of full-time employees) Minimum Essential Coverage (MEC) and at least one full-time employee goes to the Exchange/ Marketplace and receives a premium tax credit.
The IRS recently released an annual inflationary adjustment to this penalty amount for the 2024 calendar year (see Rev. Proc. 2023-17).
The annual penalty amount associated with an Applicable Large Employer that fails to offer MEC to substantially all its full-time employees (and at least one full-time employee receives a premium tax credit) is $2,970 (or $247.50 per month) per full-time employee, minus the first 30 full-time employees.
If an ALE offers “substantially all” of its full-time employees MEC, an ALE could still be subject to penalties for failing to offer affordable and Minimum Value coverage to any full-time employee that receives a premium tax credit to purchase coverage in the Exchange/Marketplace.
The IRS recently released an annual inflationary adjustment to this penalty amount for the 2024 calendar year (see Rev. Proc. 2023-17).
The annual penalty amount associated with an Applicable Large Employer that fails to offer affordable and Minimum Value coverage to a full-time employee and that full-time employee receives a premium tax credit to purchase coverage in the Exchange/Marketplace is $4,460 (or $371.66 per month) per full-time employee for each fulltime employee that receives a premium tax credit.