The Inflation Reduction Act, signed into law by President Biden this week, includes changes to employers should consider.
The Act extends the premium tax credit relief for purchasing coverage through the Affordable Care Act health insurance Marketplace. The premium subsidies allow people with income up to 150% of the federal poverty level to obtain free coverage through the Marketplace and allow people with income up to 400% of the federal poverty level to pay reduced premiums. ACA premium tax credits through the Marketplace will not expire this year and may be maintained through December 31, 2025.
The Act allocates $80 billion for IRS tax enforcement activities, including enforcing non-compliance with the Affordable Care Act. This increase in funds will assist the IRS to hire new agents and conduct more ACA audits. With more ACA audits, tax penalties for more employers are likely.
Applicable Large Employers must offer affordable, minimum essential health coverage to at least 95% of their full time employees. Never before has it been so important for employers to review their coverage offerings and make sure to offer affordable coverage where required. With enhanced tax audits, employers are well advised to confirm proper offers of coverage and send properly-completed 1095 forms to covered and full-time employees.
