Content updated on March 12, 2019

The penalty-assessment phase of the Affordable Care Act’s employer mandate has been in place as of January 1, 2015  and enforcement started towards the end of 2017: high time for US companies to pay attention. Managing their penalty risk is crucial because consequences for not meeting the coverage mandate of the Affordable Care Act is real. And those IRS penalties rise from year to year.

IRS hammers cartoon_Integrity Data ACA Compliance Solution

  • For calendar year 2019, the per-employee penalty for not offering any coverage to eligible employees went from $2,084 in 2015 to $2,500. You’ll hear this assessment referred to as the sledgehammer penalty.
  • For calendar year 2019, the per-employee penalty for offering coverage that is not deemed affordable or which does not meet the ACA standard of minimum value went from $3,126 in 2015 to $3,750. This assessment is also known as the tack hammer penalty

A company will be hit with either penalty in 2020 if, during 2019, just one employee who is eligible for an employer-sponsored health plan sought coverage on an exchange and got a premium tax credit or cost-sharing subsidy for that coverage.

ACA exposure is greatest for companies where:

  • Workers’ schedules vary.
  • Lines