2024 Affordable Care Act Penalties

The Affordable Care Act (“ACA”) Employer Mandate requires Applicable Large Employers (“ALEs”), which are employers with 50 or more full-time and full-time equivalent employees, to offer a minimum level of affordable health insurance coverage to at least 95% of their workforce and their dependents. 

Penalties have increased modestly in 2024 for failure to provide affordable health insurance coverage to employees. $2,970 annual penalties per employee, or $247.50 per month are triggered when an employer does not offer Minimum Essential Coverage to 95% of full-time employees in any calendar month. If the insurance offered is not considered affordable according to the ACA, there is an additional penalty assessed of $371.67 per month, or $4,460 annually, for each full-time employee. The penalties are calculated on a group level based on employer size and employee level based on employees who  receive a Premium Tax Credit (“PTC”). A PTC helps eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace.

Additionally, the Internal Revenue Service( IRS) charges a penalty for each information return (Form 1095-C) that an employer fails to correctly file on time with the IRS. The 2024 penalty is based on when the return is filed with the IRS as follows:

  • Up to 30 days late: $60
  • 31 days Late though August 1:  $120 
  • After August 1 or Not filed: $310
  • Intentional Disregard: $630

The penalty for the federal Individual Mandate, which required individuals to have health insurance coverage or pay an ACA tax penalty, was reduced to $0 effective for tax years beginning in 2019. Certain states (Massachusetts, New Jersey, Vermont, Rhode Island, California and also Washington DC) still impose penalties if a person does not carry health insurance.

Due to the complexities of Employer ACA reporting requirements, it is critical that employers with over 50 employees engage a professional firm, such as SPS/GZ, to assist with the coding, mailing, and e-filing of the required forms (Forms 1095-C and 1095-B) with the IRS. 

SPS/GZ is a full-service tax reporting and stock plan administration firm that provides personalized service and exceptional support, utilizing state-of-the-art technology to business clients of all sizes. We create and e-file, 1099 filing services, including 1099-NEC, 1099-MISC, Forms 1042-S, 1098-T, Affordable Care Act tax forms, and Forms 3921 and 3922. Additionally, we offer complimentary TIN-Matching services to help reduce errors prior to reporting. In addition to a thorough review of client data specifically looking for penalty triggers. 

SPS/GZ provides year-round support for our clients, including post-filing assistance and comprehensive ACA support for responses and resolutions of ACA penalties to employers and entities of all sizes and whether or not they used SPS/GZ for the initial reporting of Forms 1095-C, 1095-B, 1094-C, and 1094-B. 

Our complete and affordable solution allows administrators to simply upload their tax form data file to our secure portal in a few simple steps and we handle everything else to keep your organization compliant. Contact us today at sales@greenzapato.com or call at (888)375-3049. 

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Contact us to learn how SPS/GZ can be your company’s trusted partner for stock plan administration and tax form reporting services.