Sarah Borders, CEBS March 1, 2024 2 min read

2025 ACA Penalties Released

Recently the IRS updated its ACA webpage and FAQs reflecting the indexed changes to the ACA penalties that could apply to applicable large employers (ALEs) for the 2025 calendar year.
Who this applies to:

  • Applicable Large Employers with fully insured and self-funded health plans, including ICHRAs

Go Deeper:
Penalty A, which could apply when an applicable large employer fails to offer MEC to at least 95% of full-time employees, will decrease to $2,900 for 2025. 
Penalty B, which could apply when an ALE’s offered coverage either is unaffordable or does not meet minimum value, will decrease to $4,350 per year for 2025. 
ALEs wanting to avoid ACA penalties A or B should ensure at least 95% of full-time employees and their dependents are offered minimum essential coverage (MEC), and affordable coverage meeting minimum value is offered to all full-time eligible employees.  Therefore, employers should determine the correct codes that should be used for reporting due in Q1 2024 and 2025.
IRS Rev Procedure 2024-14:


Sarah Borders, CEBS

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.