New IRS Notice 2015-87 Announces Increase in Employer Shared Responsibility Penalties

Whatever a broker or employer knows about the ACA is subject to change with little notice. This has been the case since the ACA was enacted into law in 2010. And, the tradition continues with IRS Notice 2015-87.

IRS Notice 2015-87 is only 31 pages long. But, many of those pages warrant careful review.

Of immediate interest and concern is that the IRS has adjusted the amounts of the employer mandate penalties for 2015 and 2016. Employers who have relied on penalties remaining the same – forever – guess again!

 Question 13 of Notice 2015-87 provides the adjusted amounts of the employer mandate penalties for 2015 and 2016.

2015- Penalty A is $2,080, Penalty B is $3,120

2016- Penalty A is $2,160, Penalty B is $3,240

Question 12 states that the IRS will amend the employer mandate regulations so that the employer affordability safe harbors are adjusted for inflation to coordinate with the affordability measure used by the exchange. The question states that employers may relay on the 9.56 percent affordability safe harbor for plan years beginning in 2015 and 9.66 percent for plan years beginning in 2016. The previous affordability rate was 9.5 percent.

 

The IRS notice can be read in its entirety here.