HR and Payroll Guidance for Leadership Teams

ACA Fines to Double in 2016

On June 29, President Obama signed the Trade Preferences Extension Act of 2015. While much of the new law deals with trade preferences, one provision increases penalties for employers that fail to comply with the Affordable Care Act’s new reporting requirements beginning in 2016.

What You Need to Know

  • The penalty for failure to file a correct information return with the IRS will increase from $100 per return to $250 per return
  • The annual penalty cap will double from $1.5 million to $3 million
  • If a failure to file is intentional, the penalty will double to $500 and no annual cap will apply

These new penalties are effective on information returns and payee statements filed after December 31, 2015, and include Forms 1099, 1098, W-2, 1042-S as well as Forms 1094 and 1095.

Penalties will be reduced for employers if the failure to file is corrected within 30 days. Additionally, the one-year transition rule will still apply, which will provide exceptions during the first year of reporting to those employers and insurers who filed incorrectly or incompletely but can prove they made a good faith effort to comply with ACA reporting requirements.

What You Need to Do

Employers can reduce the likelihood of ACA noncompliance by:

  • Understanding what ACA requirements apply to their business
  • Making sure they are collecting the proper data now to be able to correctly report in 2016

To learn more about the Affordable Care Act, including its new reporting requirements, visit our Affordable Care Act Information Center or view our recent video, “ACA Reporting Requirements: Is Your Business Prepared?

For more information on how the ACA will affect your business and how PROXUS can help, contact John Israel at 215-654-9140 x. 110 or

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PROXUS is a leader in HR, payroll, and benefits solutions, serving small and mid-sized organizations across a wide range of industries and markets. Our clients benefit from the proven experience of our team of over 26 professionals who deliver deep expertise and trusted guidance in all aspects of workforce management.

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