The IRS increased the Affordable Care Act’s (ACA) pay or play penalties for the 2021 calendar year:

  • Section 4980H(a) penalty: $2,700 per full-time employee (minus the first 30 employees) when an ALE does not offer coverage to “substantially all” full-time employees and child dependents
  • Section 4980H(b) penalty: $4,600 per full time-employee who is offered coverage that is unaffordable or does not provide minimum value

As a reminder, penalties are triggered when a full-time employee receives a subsidy for insurance through the Marketplace / Exchange.

See updated FAQ #55 for annual indexed amounts for calendar years 2015 through 2021. The bulletins below summarize (1) the 2021 penalty amounts, and (2) the ACA’s pay or play rules / employer mandate to which Applicable Large Employers are subject.

Download ACA Penalties Increases for 2021 Download Large Employers Pay or Play Penalties