Risk & Business Magazine Spectrum Insurance Fall 2019 | Page 28

ACA PAY OR PLAY
IRS CONFIRMS ACA PAY OR
PLAY PENALTIES STILL APPLY
BY: KAREN HEBERT, EMPLOYEE BENEFITS ADVISOR, SPECTRUM INSURANCE GROUP
T
he 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:
28
• 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
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