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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established in 1996, The Wagner Law Group has 24 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.

 

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

 

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

 

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 

 

www.wagnerlawgroup.com

 

 

 

 

July 28, 2016

 

 Health and Welfare Law Alert

 

 

 

 Medicare-Enrolled Employees' Impact on ACA's Employer Mandate Penalty

 

 

 

 

 

The IRS has explained how employees enrolled in Medicare affect an employers' liability under the Affordable Care Act's ("ACA's") employer shared responsibility penalties.

  

Under the ACA, employers with 50 or more full-time equivalent employees are subject to one of two penalties if they fail to comply with the ACA's employer shared responsibility provisions.

  

The first penalty applies if: (i) an employer fails to offer health care coverage to "substantially all" of its full-time employees; and (ii) a low-income, full-time employee receives a premium tax credit through a Marketplace. In those situations, the employer must pay an annual penalty of $2,000 (adjusted for inflation) multiplied by the number of full-time employees in excess of 30.

  

The other penalty applies in situations where: (i) an employer offers health care coverage to its full-time employees that is either "unaffordable" or does not provide "minimum value;" and (ii) a low-income, full-time employee receives a premium tax credit through an Exchange. In such situations, the employer must pay an annual penalty of $3,000 (adjusted for inflation) for each full-time employee who receives the premium tax credit. However, this penalty is capped at $2,000 multiplied by the number of full-time employees in excess of 30.

  

The IRS confirmed that for purposes of determining whether an employer is liable for the first penalty all full-time employees are counted, regardless of whether they are enrolled in Medicare or another type of coverage.

  

Conversely, the IRS noted that an employer is liable for the second penalty only for employees who enroll in Marketplace coverage and receive a premium tax credit subsidy. Because employees who are actually enrolled in Medicare (rather than merely eligible to enroll in Medicare) cannot receive the tax credit, they do not affect an employer's liability.

 

 

 

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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.