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November 6, 2023

Checklist complying with the ACA's Pay or Play Rules for 2024

The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum-value health coverage to their full-time employees (and dependents) or potentially pay a penalty to the IRS. This employer mandate is also known as the “pay or play” rule. Small employers who are not ALEs are not subject to the ACA’s pay or play rule.

An ALE may be subject to a pay or play penalty if at least one full-time employee receives a premium tax credit for purchasing individual health coverage through an Exchange and the ALE:

  • Did not offer health plan coverage to at least 95% of full-time employees and their dependents.
  • Offered health plan coverage to at least 95% of full-time employees but not to the specific full-time employee receiving the credit.
  • Offered health plan coverage to full-time employees that was unaffordable or did not provide minimum value.

Depending on the circumstances, one of two penalties may apply under the pay or play rules: the 4980H(a) penalty or the 4980H(b) penalty.

This checklist outlines key steps for employers to comply with the ACA’s pay or play rules for 2024. Use this checklist as a guide when reviewing your company’s compliance with the ACA’s pay or play rules for 2024. For assistance, contact Christensen Group Insurance.

This checklist is merely a guideline. It is neither meant to be exhaustive nor meant to be construed as legal advice. It does not address all potential compliance issues with federal, state, or local standards. Consult your licensed representative at Christensen Group Insurance or legal counsel to address possible compliance requirements© 2023 Zywave, Inc. All rights reserved.

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