Play or Pay Penalties

The IRS’ Office of Chief Counsel has recently issued several information letters regarding the ACA’s individual and employer mandate penalties.

These letters clarify that:

  • Employer shared responsibility penalties continue to apply for applicable large employers (ALEs) that fail to offer acceptable health coverage to their full-time employees (and dependents); and
  • Individual mandate penalties continue to apply for individuals that do not obtain acceptable health coverage (if they do not qualify for an exemption).

According to the IRS, the ACA’s provisions are still effective until changed by Congress, and taxpayers are still required to follow the law, including paying any applicable penalties.

IRS Information Letters 2017-0010 and 2017-0013, addressing compliance obligations regarding the employer shared responsibility mandate, are available here and here, respectively, and IRS Information Letters 2017-0011 and 2017-0017, addressing compliance with the individual mandate can be found here and here, respectively. Additional information can also be found on the IRS website here.

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