• Coronavirus
  • Blog
  • Careers
  • Contact Us
The Safegard Group, Inc.
  • 1 (888) 892-7688
The Safegard Group, Inc.
  • Client Login
    • Commercial & Personal
    • Employee Benefits
  • Property and Casualty
    • M&A Services
  • Employee Benefits
    • Medical Funding Strategies
    • Technological Capabilities
    • Employee Education
    • Voluntary Benefits
  • Personal Insurance
    • Carrier Claims Reporting

IRS Confirms ACA Pay or Play Penalties Still Apply

17
Sep, 2019
By Roger Kirtley, Vice President
IRS Confirms ACA Pay or Play Penalties Still Apply
  • Employee Benefits
  • No comments

The IRS Office of Chief Counsel recently released an information letter regarding the employer shared responsibility (pay or play) penalties under the Affordable Care Act (ACA). This information letter confirms that the pay or play penalties continue to apply for applicable large employers (ALEs) that fail to offer acceptable health coverage to their full-time employees (and dependents). The information letter also:

  • Indicates that the law does not provide for any waiver of the pay or play penalties; and
  • Reiterates that, while several forms of transition relief were available for 2015 and 2016, no transition relief is available for 2017 and future years.

As a result, taxpayers must continue to follow the law and pay what they owe.

Action Steps for Pay or Play

This information letter reiterates the IRS’ position that the ACA’s employer mandate penalties still apply. Individuals and ALEs must continue to comply with this requirement, including paying any penalties that may be owed.

Background

The ACA’s employer shared responsibility rules require ALEs to offer affordable, minimum value health coverage to their full-time employees or pay a penalty. These rules, also known as the “employer mandate” or “pay or play” rules, only apply to ALEs, which are employers with, on average, at least 50 full-time employees, including full-time equivalent employees (FTEs), during the preceding calendar year. An ALE may be subject to a penalty only if one or more full-time employees obtain an Exchange subsidy (either because the ALE does not offer health coverage, or offers coverage that is unaffordable or does not provide minimum value).

On Jan. 20, 2017, President Trump signed an executive order intended to “to minimize the unwarranted economic and regulatory burdens” of the ACA until the law can be repealed and eventually replaced. The executive order broadly directs the Department of Health and Human Services and other federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden. However, the executive order does not include specific guidance about any particular ACA requirement or provision, and does not change any existing regulations.

IRS Information Letter

The IRS Office of Chief Counsel issued information letter number 2019-0008 clarifying that the ACA’s employer shared responsibility penalties continue to apply. This information letter was issued in response to a request from Senator Susan Collins (R-Maine) on behalf of her constituents. In her request, Senator Collins questioned whether an employer shared responsibility penalty may be waived or reduced based on hardship or other factors, as well as whether the IRS will extend the transition relief for ALEs with fewer than 100 employees.

In the information letter, the IRS clarified that the law doesn’t provide for a waiver of an employer shared responsibility penalty. In addition, while several forms of transition relief were available for 2015 and 2016, the information letter reiterates that no transition relief is available for 2017 and future years.

According to the information letter, the executive order does not change the law. The ACA’s provisions are still effective until changed by Congress, and taxpayers are still required to follow the law, including paying any applicable penalties they may owe.

More Information

For additional information on the ACA Executive Order and the current tax filing season, please visit www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals.

Looking for assistance with your employee benefits plan reporting? Contact The Safegard Group for guidance and resources.

Share this:

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to print (Opens in new window)

Related

About Roger Kirtley, Vice President

Leave a Reply Cancel reply

Categories

  • Claims & Risk Management (141)
  • Company News (64)
    • Acquisitions (0)
    • Designations (2)
    • New Hires (27)
    • Press Release (17)
    • Website (1)
  • Employee Benefits (76)
  • Personal Lines (61)
  • Property & Casualty (154)
  • Uncategorized (0)
  • White Papers (3)
    • Claims & Risk Management (0)
    • Employee Benefits (0)
    • Personal Lines (0)
    • Property & Casualty (3)

Recent Posts

  • Gambling in the Workplace December 31, 2019
  • Return to Work Program December 26, 2019
  • The Benefits of Upskilling December 24, 2019
  • Manage Cost of Risk, Control Price December 19, 2019
  • Liability from On-site Fitness Center December 17, 2019

Top Posts

  • Warehouse Housekeeping to Improve Safety
    Warehouse Housekeeping to Improve Safety
  • Amazon Purchases with Your HSA or FSA
    Amazon Purchases with Your HSA or FSA
  • Health Plan Rules: Treating Employees Differently
    Health Plan Rules: Treating Employees Differently
  • Concrete Truck Safety
    Concrete Truck Safety
  • Fueling Safely on the Worksite
    Fueling Safely on the Worksite
  • The 3 S's of Trenching Safely: Slope It, Shore It, Shield It!
    The 3 S's of Trenching Safely: Slope It, Shore It, Shield It!
  • Owners and Contractors Protective Liability
    Owners and Contractors Protective Liability
  • Gambling in the Workplace
    Gambling in the Workplace
  • Return to Work Program
    Return to Work Program
  • The Benefits of Upskilling
    The Benefits of Upskilling
  • @safegardgroup We are proud to share that our own Safety Consultant, Joe Abbonizio was recognized for “Safety Person of the Year”… https://t.co/bbkRCBF4fw by The Safegard Group

    May 11, 2022
  • @safegardgroup We're thrilled to announce we made the Philadelphia Inquirer's 2022 #TopWorkplaces list. This award means the world… https://t.co/yKwTNcERLN by The Safegard Group

    April 19, 2022
  • @safegardgroup We came together to participate in a non-perishable food drive for one of our clients! All donations will benefit f… https://t.co/ISjhO7QAsZ by The Safegard Group

    November 24, 2021
  • @safegardgroup Our Claims Department is looking for a new Claims Consultant, find out more on our website: https://t.co/MNvgnN8tc7 https://t.co/8x8jxcRFWd by The Safegard Group

    August 19, 2021
  • @safegardgroup Our Employee Benefits team is growing! We're currently seeking a new Employee Benefits Account Executive/Manager, f… https://t.co/jRyBjmbgIg by The Safegard Group

    August 19, 2021
  • @safegardgroup We are looking for a full time Commercial Insurance Account Executive/Manager! Find out all of the details and appl… https://t.co/ABUX3Klfzk by The Safegard Group

    August 19, 2021
  • @safegardgroup Job Opening! We are currently recruiting for an entry-level position with our company as an HR Administrator/Execut… https://t.co/gVWuihSKFZ by The Safegard Group

    May 24, 2021
  • @safegardgroup We're hiring! We are looking for a full-time Small Business Account Representative with previous experience in an i… https://t.co/OrP2naH15f by The Safegard Group

    March 5, 2021
  • @safegardgroup Planning to move? Get 30 things to do for 30 days to help make your move easier. https://t.co/pImf1Fj4DU https://t.co/Kl7PLxG5gd by The Safegard Group

    August 7, 2020
  • @safegardgroup Do you know the signs of heat exhaustion? Here are important guidelines to learn how to spot it, prevent it and hel… https://t.co/IHGBWhths8 by The Safegard Group

    August 5, 2020
  • @safegardgroup Increasing your following distance during heavy rain can help keep you safer. Get more safe driving tips:… https://t.co/inKj5IP7lO by The Safegard Group

    August 3, 2020
  • @safegardgroup Use this checklist as a guide when selecting a contractor for your next home renovation. https://t.co/hyLFpwt9Un https://t.co/3konDQs0li by The Safegard Group

    July 31, 2020
  • @safegardgroup Thinking about solar power for your home? Here are a few things to consider before installation:… https://t.co/S2XQAh9VzK by The Safegard Group

    July 29, 2020
  • @safegardgroup Hitting the road this summer? Consider the following tips to help avoid work zones. Share them with your friends an… https://t.co/6kVw4GojnX by The Safegard Group

    July 27, 2020
  • @safegardgroup Moving? Use this three-step packing process from Travelers for a smoother transition to your new home. #ThinkSafe… https://t.co/LhWADcYjX0 by The Safegard Group

    July 24, 2020
  • @safegardgroup Going on vacation? Here are some basic home security steps you can take to help create a secure environment while y… https://t.co/nnSacDWSrk by The Safegard Group

    July 22, 2020
  • @safegardgroup Are you ready to enjoy your time by the pool? Don’t forget the pool safety tips. Share them with your friends & fam… https://t.co/NgwJptoT3M by The Safegard Group

    July 20, 2020
  • @safegardgroup Trying to find the right home inspector? Here are some questions from Travelers to ask potential candidates… https://t.co/r16ZcJDCZA by The Safegard Group

    July 17, 2020
  • @safegardgroup Thunderstorms can strike with little to no warning, bringing dangerous lightning. Do you know how to react if you’r… https://t.co/BbYMxMhjaP by The Safegard Group

    July 15, 2020
  • @safegardgroup Ready to enjoy your fire pit? Read these safety tips to help avoid injury and damage to your home.… https://t.co/LNIZ5n4jKo by The Safegard Group

    July 13, 2020

Subscribe to our Newsletter

By subscribing to our mailing list you will get the latest news from us.

Latest Posts

  • Gambling in the Workplace December 31, 2019
  • Return to Work Program December 26, 2019
  • The Benefits of Upskilling December 24, 2019

Contact

  • The Safegard Group, Inc.
    100 Granite Drive, Suite 205
    Media, PA 19063
  • Phone: 1 (888) 892-7688
    Fax: (610) 892-7695
  • eassistant@safegardgroup.com

Follow Us

© 2020 The Safegard Group, Inc.