The Internal Revenue Service (IRS) has released Rev. Proc. 2019-29, which contains the inflation adjusted amounts for 2020 used to determine whether employer-sponsored coverage is “affordable” for purposes of the Affordable Care Act’s (ACA) employer shared responsibility provisions and premium tax credit program. As shown in the table below, for plan years beginning in 2020, the affordability percentage for employer mandate purposes is indexed to 9.78%. Employer shared responsibility payments are also indexed.
|Description||Coverage not offered to 95% (or all but 5) of full-time employees.||Coverage offered, but unaffordable or is not minimum value.||Premium credits and affordability safe harbors.|
*Section 4980H(a) and (b) penalties for 2019 and 2020 are projected.
**No employer shared responsibility penalties were assessed for 2014.
Under the ACA, applicable large employers (ALEs) must offer affordable health insurance coverage to full-time employees. If the ALE does not offer affordable coverage, it may be subject to an employer shared responsibility payment. An ALE is […]