An Applicable Large Employer (ALE) that does not offer coverage meeting certain requirements under Code Section 4980H may have exposure to an employer shared responsibility payment (ESRP). The ESRP amounts are indexed each tax year as shown in the table below and calculated based on information reported on the ALE’s Forms 1094-C and 1095-C.
If the ALE reports that it did not offer coverage to at least 95% of its full-time employees and dependents and at least one full-time employee receives a subsidy for Marketplace coverage, then the IRS will propose an ESRP amount that is equal to the number of full-time employees (minus up to 30) multiplied by the 4980H(a) ESRP amount. Alternatively, even where the ALE offers coverage to enough full-time employees and dependents, if the ALE reports that the coverage offered did not meet minimum value or affordability standards and a full-time employee receives a subsidy for Marketplace coverage, the IRS will propose an ESRP amount that is equal to the number of full-time employees receiving the subsidy multiplied by the 4980H(b) ESRP amount.
Haff & Raggio has saved millions for clients hit with these ESRPs through the IRS Letter 226J response process. Even if you have already submitted payment, you may be due a refund. Contact us today at appeals@eligibiltiytrackingcalculators.com for more information about how we can help your business.
| Tax Year | 4980H(a) | 4980H(b) |
| 2015 | $2,080 per year or $173.33 per month | $3,120 per year or $260 per month |
| 2016 | $2,160 per year or $180.00 per month | $3,240 per year or $270 per month |
| 2017 | $2,260 per year or $188.33 per month | $3,390 per year or $282.50 per month |
| 2018 | $2,320 per year or $193.33 per month | $3,480 per year or $290 per month |
| 2019 | $2,500 per year or $208.33 per month | $3,750 per year or $312.50 per month |
| 2020 | $2,570 per year or $214.17 per month | $3,860 per year or $321.67 per month |
| 2021 | $2,700 per year or $225 per month | $4,060 per year or $338.33 per month |
| 2022 | $2,750 per year or $229.17 per month | $4,120 per year or $343.33 per month |
| 2023 | $2,880 per year or $240 per month | $4,320 per year or $360 per month |
| 2024 | $2,970 per year or $247.50 per month | $4,460 per year or $371.67 per month |
Source: IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act, Question No. 55, available at: https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act#Calculation