The IRS updated two Q&As on its Employer Shared Responsibility Provisions web page. One of the Q&As updates penalties for 2021 and the second confirms the previously announced affordability percentage for 2021 (see our July 23rd blog).
Q&A 55 updates the 4980H(a) penalty when an ALE fails to offer coverage to at least 95 percent of its full-time employees (and their dependents) and at least one full-time employee receives a premium tax credit.
Q&A 55 also updates the 4980H(b) penalty when an ALE’s coverage is either unaffordable or does not offer minimum value and at least one full-time employee receives a premium tax credit.
Q&A 40 updates the affordability percentage, which represents a cost-sharing limit for group health plan coverage.
The updates are summarized below:
| 2021 | 2020 | |
| 4980H(a) Penalty | $2,700 | $2,570 |
| 4980H(b) Penalty | $4,060 | $3,860 |
| Required Contribution | 9.83% | 9.78% |
See ComplianceDashboard for the latest health plan penalties, fees and limits.