The Tack Hammer Penalty
A lesser penalty applies to employers who offer a health plan that does not meet ACA standards – either for quality or affordability: the so called “tack hammer” penalty.
How the “tack hammer” penalty is calculated in 2019: An employer subject to this penalty will pay $3,860 for each Full-Time employee (if they obtained a subsidy on an exchange) after excluding the first 30 Full-Time employees from the calculation. So, employers who are subject to this penalty will be charged $321.67 per month per eligible employee who is subject to the penalty.
The exception to this penalty is that the total amount must not exceed the amount the employer would have paid as a penalty for offering no coverage at all. So, there is a financial break, as far as penalties are concerned, for offering even minimal coverage.
This penalty also makes an exception for any full-time employee who is in a Waiting Period.
The Non-Filing Penalty
The third type of penalty applies to employers who fail to comply or fail to properly document their compliance. This is the Non-Filing Penalty.
Employers who fail to file year-end 1095-C and 1094-C forms with the IRS will be penalized a minimum of $550 per eligible employee. This penalty is similar to the one for failing to file W-2 forms for employees.