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The IRS has clarified that there is no statute of limitations on pay or play penalty assessments under the Affordable Care Act (ACA). A statute of limitations usually sets a maximum time limit for parties to take legal action. Because there is no time limit, the IRS can assess penalties for an applicable large employer’s (ALE) noncompliance years after the violation occurred.
Pay or play, otherwise known as the employer mandate, imposes penalties on ALEs if they don’t offer affordable health insurance coverage and provide minimum value to 95% of their full-time employees.
To avoid penalties, employers should ensure that they are complying with the rules for each applicable year.
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