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Penalty increase for employers who fail to comply with ACA “pay or play” rules

September 26, 2022 Article 1 min read
Scott McLellan Jonathon Trionfi
The IRS has updated its “pay or play” provisions. Employers who fail to comply with ACA rules should prepare for penalty increases in 2023.
Businessman using a laptop computer.In August 2022, the IRS updated its frequently asked questions (FAQs) on the employer-shared responsibility rules (commonly referred to as the “pay or play” rules) under the Affordable Care Act (ACA) to include updated penalty amounts for 2023. For calendar year 2023, the inflation adjusted $2,000 penalty amount is $2,880 and the adjusted $3,000 penalty amount is $4,320.

Download the bulletin to get a breakdown of the potential penalties (4980H(a) penalty or the 4980H(b) penalty) that may apply under the pay or play rules and a summary of when an employer is liable for a penalty.

Large employers (at least 50 full-time and full-time equivalent employees) should work with a trusted advisor to ensure full compliance with the ACA rules applicable to them. For more details on the ACA “pay or play” provisions, contact Plante Moran Group Benefit Advisors.

This compliance bulletin is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2022 Zywave, Inc. All rights reserved.

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