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Pay or Play Penalties Increase

penalty increase

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Note: Last week’s article confirmed that pay or play penalties still continue to apply to applicable large employers. This week’s legislative alert discusses increased penalty amounts. We trust you are in compliance already.

The IRS has updated their Questions and Answers regarding the employer shared responsibility rules (pay or play) under the Affordable Care Act. It includes adjusted penalty amounts for 2019 and 2020.

The amounts will be increased as follows:

  • For the calendar year 2019, the adjusted $2,000 amount is $2,500 and the adjusted $3,000 amount is $3,750.
  • For the calendar year 2020, the adjusted $2,000 amount is $2,570 and the adjusted $3,000 amount is $3,860.

Employers that are subject to these rules should make sure they are offering the required coverage or they may have increased penalties for each year in which they fail to comply.

Download the bulletin for more details.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Erin Woulfe

Erin Woulfe

Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization, or providing tips and how-to’s to help them make their job easier.”