IRS Rev. Proc. 2023-17: Adjustments Under Section 4980H to Calculate 2024 Employer Shared Responsibility Payments

The Internal Revenue Service (IRS) has released IRS Rev. Proc. 2023-17, which provides indexing adjustments for the applicable dollar amounts under § 4980(H)(a) and (b)(1). These indexed amounts are necessary to calculate the employer-shared responsibility payments (ERSP) under these sections. This revenue procedure is effective for taxable and plan years beginning after December 31, 2023.

The IRS based on the 2024 indexing adjustments to the dollar amounts on the premium adjustment percentage that the U.S. Department of Health and Human Services (HHS) published on December 12, 2022, using the most recent National Health Expenditure Accounts (NHEA) income and premium data. Any increases not a multiple of ten are rounded to the next lowest multiple of ten. As a result, for the calendar year 2024, the adjusted $2,000 amount under § 4980H(c)(1) is $2,970, and the adjusted $3,000 amount under § 4980H(b)(1) is $4,460.

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