IRS Announces Increases to 2024 Employer Shared Responsibility Penalties

On March 9, 2023, the IRS released Revenue Procedure 2023-17, which provides, in part, indexing adjustments for penalties under the employer mandate. As a reminder, the ACA requires applicable large employers (ALEs) – those with 50 or more full-time and full-time equivalent employees (FTEs) – to offer affordable minimum value coverage to substantially all FTEs and their dependents or risk a penalty.

For plan years beginning after December 31, 2023, the annual penalties are as follows:

• Penalty A (failure to offer coverage to substantially all FTEs) – $2,970 per FT employee.
• Penalty B (failure to offer affordable coverage that meets minimum value standards) – $4,460 per FT employee receiving a premium tax credit.

Although generally expressed as an annual amount, as listed above, both penalties are calculated and assessed on a monthly basis.

Revenue Procedure 2023-17 »