Nov 29, 2023
2024 ACA Pay or Play and Filing Late Penalties
2024 ACA Pay or Play Penalties
Under the Pay or Play rules, an ALE (applicable large employer) could be liable for a penalty if at least one full-time employee receives a subsidy for Exchange coverage.
If the ALE is offering affordable and minimum value coverage to full-time employees, the employees are not eligible for Exchange coverage or subsidies.
2024 ACA Pay or Play Penalty Rates
| Penalty | 2023 | 2024 | Increase |
|---|---|---|---|
| Penalty A | $2,880 | $2,970 | ↑ $90 per employee |
| Penalty B | $4,320 | $4,460 | ↑ $140 per employee |
Refresher of the 2 Penalty types.
The penalties will be based on the 2024 calendar year and the information reported during the ACA reporting period in early 2025.
Penalty A (under Section 4980H(a)
The ALE would be subject to this penalty if they do not offer minimum essential coverage to 95% of all full-time employees (penalty calculation would deduct the first 30 employees) and their dependents. The penalty would come about if any full-time employee purchases subsidized coverage through the Exchange.
Penalty B (under Section 4980H(b)
The ALE would be subject to this penalty if they do not offer coverage that is affordable and provides minimum value. The penalty would come about if a full-time employee receives subsidized coverage through the Exchange. The penalty would apply to the employee receiving a subsidy through the Exchange if triggered.
More information can be found by clicking on the IRS website links below.
Employer Share Responsibility Provisions
Types of Employer Payments and How They Are Calculated
2024 Penalties for 1094/1095C Late Filing
There are also penalties for filing 1094/1095 statements late with the IRS, for filing incorrect forms, or for not filing at all.
The penalties have increased over the years since 2011 and have increased again in 2024.
The deadline for filing this past year was February 28, 2023 if filing paper copies of the 1094C (transmittal) and all copies of the 1095C. The deadline was March 31, 2023 if filing electronically.
The deadline for filing 2023 information in early 2024 is February 28, 2024 if filing paper copies of the the 1094C (transmittal) and all copies of the 1095C and if filing less than 10 forms. The deadline is April 1, 2024 if filing electronically. Remember, any employer reporting with the IRS must file electronically if filing 10 or more forms.
Penalties for 2024 for Each Late Return or Payee Statement or No Return or Payee Statement
| Year Due | Up to 30 Days Late | 31 Days Late Thru August 1 | After August 1 or Not Filed | Intentional Disregard |
|---|---|---|---|---|
| 2024 | $60 | $120 | $310 | $630 |
| 2023 | $50 | $110 | $290 | $580 |
| 2022 | $65 | $110 | $280 | $570 |
Maximum penalties are different for small business and large businesses. There is no maximum penalty for ‘intentional disregard’.
Interest is charged on penalties noted above.
More detail can be reviewed on the IRS web site.
More information can be found in our article posted earlier this year.
While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.
