Understanding the 2023 Employer Mandate Penalties for Not Providing Health Insurance
Providing a group health insurance plan to your employees is one of the best ways to attract and retain top talent. And because healthier, happier workers are also more productive, providing health insurance benefits you too. But if you’re running a company with 50 or more full-time employees, health insurance is not just a benefit; it’s a requirement.
The Employer Shared Responsibility Provisions (ESRP) of the Patient Protection and Affordable Care Act, otherwise known as the employer mandate, requires businesses with 50 or more full-time employees to provide a group health insurance plan. Companies that don’t comply with the mandate can face penalties from the IRS.
For 2023, the updated penalties are detailed on the IRS website as follows:
“An applicable large employer that fails to offer minimum essential coverage to 95% of full-time employees (Section 4980H(a) penalty): 2023 penalty is $2,880 per full-time employee if only one full-time employee receives subsidized coverage through the Exchange or Marketplace, a 4.7% increase from the $2,750 amount for 2022.
An applicable large employer that fails to offer affordable or minimum value coverage (Section 4980H(b) penalty): 2023 penalty is $4,320 per full-time employee who receives subsidized coverage through the Exchange or Marketplace, a 5.2% increase from the $4,120 amount for 2020.”
Clearly, those are not consequences that any business wants to face. But you have time to comply with the law so that you don’t face this outcome when you file your taxes next year. If your company is growing and soon to surpass 50 full-time employees, call us right away to discuss your health insurance plan options. We can help you identify the plan that works best for your situation, while helping you to maintain compliance with the law.