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Affordable Care Act Potential Penalties

The ACA Management Tool® calculates Affordable Care Act Potential Penalties.  The estimated Section A and Section B penalties can be reviewed on a month-by-month basis and in total for the Tax Year.

Under the Affordable Care Act there are two types of penalties that an Applicable Large Employer (ALE) may be assessed. This blog post lists important details regarding these penalties that every ALE should understand before they file their 1094/1095C Forms with the IRS.

Assessed on Each ALE Member (EIN) Individually

Section 4980H(a), 95% Rule

Employer did not provide an Offer of MEC to more than 5% of its eligible employees, or 5 eligible employees, whichever is greater.
All or Nothing: If you fail the test you pay penalties on everyone that was eligible, even if you made an offer, and even if they accepted.
Triggers when one eligible employee purchases MEC from a Public Exchange and receives a subsidy.
Penalty: $2160 per person x 1/12 per month ($180/month) Tax Year 2016.
Minus the first 30 employees per ALE (Prorated if additional ALE Members).

Section 4980H(b), Minimum Value and Affordability

Employer offered MEC that did not meet MV or Affordability standards.
Assessed on a one-to-one basis.
Penalty: $3240  per person x 1/12 per month ($270/month) Tax Year 2016.
The total cannot exceed the Section(a) penalty amount.
Only triggered if an eligible employee purchased MEC from a Public Exchange and received a subsidy.

Failure to File Information Returns

$260 per each return, capped at $3,193,000 per calendar year
$260 per each employee statement, capped at $3,193,000 per calendar year

Please Note: This information is provided as educational information only and is not intended to be construed as legal advice. Employers with questions specific to their situation should contact legal counsel for advisement with regard to the Patient Protection and Affordable Care Act (PPACA).


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Avoid Penalties:  Contact us & achieve compliance on ACA Reporting!

ACA GPS has developed the ACA Management Tool® to assist employers (Large and Small) with achieving compliance with the ACA.  We are authorized to transmit 1094/1095 B and C series forms for private businesses, government entities, and insurance companies.    

The products we offer include:

Full Subscription – includes tracking, analysis, eligibility, affordability, offers, responses, and:

                Initial Subscription for one year term

                Single Company Set Up (single EIN) for up to 1,000 employee records.  (Additional employee records are just $1.00 ea)

                Price is $1,995.00 (Additional EINs reporting under common ownership are just $900 ea)

The Full Subscription solution is best for employers that need to track hours to determine eligibility, and want to keep up with their offers & responses, etc, all in one place.  This subscription includes creating printable PDF versions of the 1095 C (or B) forms required under IRC §6055 and §6056.  The Tool® will e-File the forms using our TCC number, on behalf of the employer after review.

We also offer Reporting Only Subscriptions which employers can use to create printable versions of the 1094/1095 (Bs or Cs) for distribution to the employees & e-filing with the IRS.  This subscription is appropriate for employers that need a reporting solution, not a tracking solution.  A Reporting Only Subscription is $825 per EIN, for up to 1,000 Form 1095’s for Tax Year 2016.  (Additional 1095s are $.50 ea).

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