(MEP) The $36,500 per employee ACA penalty

The Internal Revenue Service has threatened employers with Affordable Care Act penalties of $36,500 per employee, per year, nondeductible. Makes those $2,000 and $3,000 penalties look like small potatoes, right?

The targets of this particular Q&A are employers who maintain “non-integrated” “employer payment plans.” These are new terms, which include reimbursement plans such as health reimbursement arrangements (HRAs, excluding retiree-only and excepted benefits HRAs). Those should generally have been eliminated by Jan. 1, 2014, or amended to be integrated with group health coverage.

The federal agencies dropped this bomb on employers on the cusp of open enrollment season last year, and many employers had to scramble into compliance. You could have done the math on the $100 per day excise tax. But the IRS puts this $36,500 figure into a Q&A for a reason: it wants to scare you. And employers need to know that a non-integrated employer payment plan is just one of many potential triggers of these potentially devastating excise taxes.

When I first blogged about health care plan self-audit, self-correction, and self-reporting compliance issues on Form 8928, no one seemed too interested. It’s time to get interested.

Source: Employee Benefit News