26 U.S.C. § 4980D

Failure to meet certain group health plan requirements

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(a) General rule

There is hereby imposed a tax on any failure of a group health plan to meet the requirements of chapter 100 (relating to group health plan requirements).

(b) Amount of tax(1) In general

The amount of the tax imposed by subsection (a) on any failure shall be $100 for each day in the noncompliance period with respect to each individual to whom such failure relates.

(2) Noncompliance periodFor purposes of this section, the term “noncompliance period” means, with respect to any failure, the period—(A) beginning on the date such failure first occurs, and(B) ending on the date such failure is corrected.(3) Minimum tax for noncompliance period where failure discovered after notice of examinationNotwithstanding paragraphs (1) and (2) of subsection (c)—(A) In generalIn the case of 1 or more failures with respect to an individual—(i) which are not corrected before the date a notice of examination of income tax liability is sent to the employer, and(ii) which occurred or continued during the period under examination,the amount of tax imposed by subsection (a) by reason of such failures with respect to such individual shall not be less than the lesser of $2,500 or the amount of tax which would be imposed by subsection (a) without regard to such paragraphs.(B) Higher minimum tax where violations are more than de minimis

To the extent violations for which any person is liable under subsection (e) for any year are more than de minimis, subparagraph (A) shall be applied by substituting “$15,000” for “$2,500” with respect to such person.

This paragraph shall not apply to any failure under a church plan (as defined in section 414(e)).

No tax shall be imposed by subsection (a) on any failure during any period for which it is established to the satisfaction of the Secretary that the person otherwise liable for such tax did not know, and exercising reasonable diligence would not have known, that such failure existed.

(2) Tax not to apply to failures corrected within certain periodsNo tax shall be imposed by subsection (a) on any failure if—(A) such failure was due to reasonable cause and not to willful neglect, and(B)(i) in the case of a plan other than a church plan (as defined in section 414(e)), such failure is corrected during the 30-day period beginning on the first date the person otherwise liable for such tax knew, or exercising reasonable diligence would have known, that such failure existed, and(ii) in the case of a church plan (as so defined), such failure is corrected before the close of the correction period (determined under the rules of section 414(e)(4)(C)).(3) Overall limitation for unintentional failuresIn the case of failures which are due to reasonable cause and not to willful neglect—(A) Single employer plans(i) In generalIn the case of failures with respect to plans other than specified multiple employer health plans, the tax imposed by subsection (a) for failures during the taxable year of the employer shall not exceed the amount equal to the lesser of—(I) 10 percent of the aggregate amount paid or incurred by the employer (or predecessor employer) during the preceding taxable year for group health plans, or(II) $500,000.(ii) Taxable years in the case of certain controlled groups

For purposes of this subparagraph, if not all persons who are treated as a single employer for purposes of this section have the same taxable year, the taxable years taken into account shall be determined under principles similar to the principles of section 1561.

(B) Specified multiple employer health plans(i) In generalIn the case of failures with respect to a specified multiple employer health plan, the tax imposed by subsection (a) for failures during the taxable year of the trust forming part of such plan shall not exceed the amount equal to the lesser of—(I) 10 percent of the amount paid or incurred by such trust during such taxable year to provide medical care (as defined in section 9832(d)(3)) directly or through insurance, reimbursement, or otherwise, or(II) $500,000. For purposes of the preceding sentence, all plans of which the same trust forms a part shall be treated as one plan.(ii) Special rule for employers required to pay tax

If an employer is assessed a tax imposed by subsection (a) by reason of a failure with respect to a specified multiple employer health plan, the limit shall be determined under subparagraph (A) (and not under this subparagraph) and as if such plan were not a specified multiple employer health plan.

(4) Waiver by Secretary

In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved.

(d) Tax not to apply to certain insured small employer plans(1) In general

In the case of a group health plan of a small employer which provides health insurance coverage solely through a contract with a health insurance issuer, no tax shall be imposed by this section on the employer on any failure (other than a failure attributable to section 9811) which is solely because of the health insurance coverage offered by such issuer.

(2) Small employer(A) In general

For purposes of paragraph (1), the term “small employer” means, with respect to a calendar year and a plan year, an employer who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year. For purposes of the preceding sentence, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer.

(B) Employers not in existence in preceding year

In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.

Any reference in this paragraph to an employer shall include a reference to any predecessor of such employer.

(3) Health insurance coverage; health insurance issuer

For purposes of paragraph (1), the terms “health insurance coverage” and “health insurance issuer” have the respective meanings given such terms by section 9832.

(e) Liability for taxThe following shall be liable for the tax imposed by subsection (a) on a failure:(1) Except as otherwise provided in this subsection, the employer.(2) In the case of a multiemployer plan, the plan.(3) In the case of a failure under section 9803 (relating to guaranteed renewability) with respect to a plan described in subsection (f)(2)(B), the plan.(f) DefinitionsFor purposes of this section—(1) Group health plan

The term “group health plan” has the meaning given such term by section 9832(a).

(2) Specified multiple employer health planThe term “specified multiple employer health plan” means a group health plan which is—(A) any multiemployer plan, or(B) any multiple employer welfare arrangement (as defined in section 3(40) of the Employee Retirement Income Security Act of 1974, as in effect on the date of the enactment of this section).(3) CorrectionA failure of a group health plan shall be treated as corrected if—(A) such failure is retroactively undone to the extent possible, and(B) the person to whom the failure relates is placed in a financial position which is as good as such person would have been in had such failure not occurred.(g) Application to requirements imposed on certain entities providing pharmacy benefit management services

In the case of any requirement under section 9826 that applies with respect to an entity providing pharmacy benefit management services on behalf of a group health plan, any reference in this section to such group health plan (and the reference in subsection (e)(1) to the employer) shall be treated as including a reference to such entity.

(Added Pub. L. 104–191, title IV, § 402(a), Aug. 21, 1996, 110 Stat. 2084; amended Pub. L. 105–34, title XV, § 1531(b)(2), Aug. 5, 1997, 111 Stat. 1085; Pub. L. 109–135, title IV, § 412(ww), Dec. 21, 2005, 119 Stat. 2640; Pub. L. 119–75, div. J, title VII, § 6701(c)(3), Feb. 3, 2026, 140 Stat. 732.)Editorial NotesReferences in Text

Section 3(40) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (f)(2)(B), is classified to section 1002(40) of Title 29, Labor.

The date of the enactment of this section, referred to in subsec. (f)(2)(B), is the date of enactment of Pub. L. 104–191, which was approved Aug. 21, 1996.

Amendments

2026—Subsec. (g). Pub. L. 119–75 added subsec. (g).

2005—Subsec. (a). Pub. L. 109–135 substituted “plan requirements” for “plans requirements”.

1997—Subsec. (a). Pub. L. 105–34, § 1531(b)(2)(A), substituted “plans” for “plan portability, access, and renewability”.

Subsec. (c)(3)(B)(i)(I). Pub. L. 105–34, § 1531(b)(2)(B), substituted “9832(d)(3)” for “9805(d)(3)”.

Subsec. (d)(1). Pub. L. 105–34, § 1531(b)(2)(C), inserted “(other than a failure attributable to section 9811)” after “on any failure”.

Subsec. (d)(3). Pub. L. 105–34, § 1531(b)(2)(D), substituted “section 9832” for “section 9805”.

Subsec. (f)(1). Pub. L. 105–34, § 1531(b)(2)(E), substituted “section 9832(a)” for “section 9805(a)”.

Statutory Notes and Related SubsidiariesEffective Date of 1997 Amendment

Pub. L. 105–34, title XV, § 1531(c), Aug. 5, 1997, 111 Stat. 1085, provided that: “The amendments made by this section [enacting sections 9811 and 9812 of this title, amending this section and sections 9801 and 9831 of this title, and renumbering sections 9804 to 9806 of this title as sections 9831 to 9833 of this title] shall apply with respect to group health plans for plan years beginning on or after January 1, 1998.”

Effective Date

Pub. L. 104–191, title IV, § 402(c), Aug. 21, 1996, 110 Stat. 2087, provided that: “The amendments made by this section [enacting this section] shall apply to failures under chapter 100 of the Internal Revenue Code of 1986 (as added by section 401 of this Act).”

Notes of Decisions

Cited in 62 cases (4 in the last 5 years), 2012–2025 · leading case: Cyril Korte v. HHS, 735 F.3d 654 (7th Cir. 2013).

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Cyril Korte v. HHS, 735 F.3d 654 (7th Cir. 2013). · cites it 10× “The mandate is backed by stiff tax penalties against employers that fail to comply, see 26 U.S.C. §§ 4980D, 4980H, but there are additional consequences for noncompliance, including ERISA enforce- ment actions by the Secretary of Labor and plan participants and beneficiaries,…”

Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013). · cites it 10× “, 26 U.S.C. §§ 4980D, 4980H; 29 U.S.C. §§ 1132 , 1185d.”

The Roman Catholic Archdiocese of Atlanta v. Sec'y of the U.S. Dep't of Health & Human Servs., 818 F.3d 1122 (11th Cir. 2016). · cites it 3× “26 U.S.C. § 4980D(b)(1). The Women’s Health Amendment 4 Case: 14-12696 Date Filed: 02/18/2016 Page: 5 of 148 to the ACA added to the minimum coverage requirements a mandate that group health plans provide women with coverage for preventive care and screenings.”

Conestoga Wood Specialties Corp. v. Sec'y of the United States Dep't of Health & Human Servs., 724 F.3d 377 (3rd Cir. 2013). · cites it 5× “See 26 U.S.C. § 4980D. The Department of Labor and plan participants may also bring a suit against an employer that fails to comply with the Mandate.”

Priests for Life v. United States Dep't of Health & Human Servs., 808 F.3d 1 (D.C. Cir. 2015). · cites it 2× “They are unlike the plaintiffs in Kaemmerling and Bowen, as they have shown they are themselves being compelled to modify their behavior. If Plaintiffs do not act in violation of their beliefs, however, they face two alternatives.”

Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, 140 S. Ct. 2367 (2020). “26 U.S.C. § 4980D(b)(1). "And if the employer decides to stop providing health insurance altogether and at least one full-time employee enrolls in a health plan and qualifies for a subsidy on one of the government-run ACA exchanges, the employer must pay $2,000 per year for each…”

Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014). “26 U.S.C. § 4980D. For Hobby Lobby, the bill could amount to $1.”

Ave Maria Found. v. Sebelius, 991 F. Supp. 2d 957 (E.D. Mich. 2014). · cites it 4× “See 26 U.S.C. §§ 4980D(a), 4980H(a). Although smaller employers need not sponsor a health plan, if they elect to do so, the government asserts that their health plans must also meet the minimum coverage requirements.”

Tyndale House Publishers, Inc. v. Sebelius, 904 F. Supp. 2d 106 (D.D.C. 2012). · cites it 2× “§ 1132 (a) (civil enforcement actions by the Department of Labor and insurance plan participants); 26 U.S.C. § 4980D(a), (b) (penalty of $100 per day per employee for noncompliance with coverage provisions of the ACA); 26 U.”

William Grote, III v. Kathleen Sebe, 708 F.3d 850 (7th Cir. 2013). · cites it 2× “§ 1132 (a); a penalty of $100 per day per employee, see 26 U.S.C. § 4980D(a)-(b); and an annual tax surcharge of $2,000 per employee, see id.”

Grace Schs. v. Sylvia Mathews Burwell, 801 F.3d 788 (7th Cir. 2015). · cites it 2× “§ 4980H(c), or $100 per day per employee for providing insurance that excludes the required contraceptive coverage, 26 U.S.C. § 4980D, and will face the risk of other enforcement actions.”

Eternal Word Television Network, Inc. v. Sec'y, U.S. Dep't of Health & Human Servs., 756 F.3d 1339 (11th Cir. 2014). · cites it 2× “26 U.S.C. § 4980D(b)(i). If that is not a substantial burden on the free exercise of religion, then it is hard to imagine what would be.”

Show all 62 citing cases →

— 26 U.S.C. § 4980D(a) — 19 cases

Cyril Korte v. HHS, 735 F.3d 654 (7th Cir. 2013). “The mandate is backed by stiff tax penalties against employers that fail to comply, see 26 U.S.C. §§ 4980D, 4980H, but there are additional consequences for noncompliance, including ERISA enforce- ment actions by the Secretary of Labor and plan participants and beneficiaries,…”

Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013). “, 26 U.S.C. §§ 4980D, 4980H; 29 U.S.C. §§ 1132 , 1185d.”

Tyndale House Publishers, Inc. v. Sebelius, 904 F. Supp. 2d 106 (D.D.C. 2012). “§ 1132 (a) (civil enforcement actions by the Department of Labor and insurance plan participants); 26 U.S.C. § 4980D(a), (b) (penalty of $100 per day per employee for noncompliance with coverage provisions of the ACA); 26 U.”

Conestoga Wood Specialties Corp. v. Sec'y of the United States Dep't of Health & Human Servs., 724 F.3d 377 (3rd Cir. 2013). “See 26 U.S.C. § 4980D. The Department of Labor and plan participants may also bring a suit against an employer that fails to comply with the Mandate.”

William Grote, III v. Kathleen Sebe, 708 F.3d 850 (7th Cir. 2013). “§ 1132 (a); a penalty of $100 per day per employee, see 26 U.S.C. § 4980D(a)-(b); and an annual tax surcharge of $2,000 per employee, see id.”

— 26 U.S.C. § 4980D(b) — 7 cases

Sharpe Holdings, Inc. v. United States Dep't of Health & Human Servs., 801 F.3d 927 (8th Cir. 2015).

Roman Catholic Diocese v. Sebelius, 927 F. Supp. 2d 406 (N.D. Tex. 2013).

Zubik v. Sebelius, 983 F. Supp. 2d 576 (W.D. Pa. 2013).

Catholic Health Care Sys. v. Burwell, 796 F.3d 207 (2d Cir. 2015).

— 26 U.S.C. § 4980D(b)(1) — 11 cases

The Roman Catholic Archdiocese of Atlanta v. Sec'y of the U.S. Dep't of Health & Human Servs., 818 F.3d 1122 (11th Cir. 2016). “26 U.S.C. § 4980D(b)(1). The Women’s Health Amendment 4 Case: 14-12696 Date Filed: 02/18/2016 Page: 5 of 148 to the ACA added to the minimum coverage requirements a mandate that group health plans provide women with coverage for preventive care and screenings.”

Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013). “, 26 U.S.C. §§ 4980D, 4980H; 29 U.S.C. §§ 1132 , 1185d.”

Priests for Life v. United States Dep't of Health & Human Servs., 808 F.3d 1 (D.C. Cir. 2015). “They are unlike the plaintiffs in Kaemmerling and Bowen, as they have shown they are themselves being compelled to modify their behavior. If Plaintiffs do not act in violation of their beliefs, however, they face two alternatives.”

Commonwealth of Pennsylvania v. President United States, 888 F.3d 52 (3rd Cir. 2018).

— 26 U.S.C. § 4980D(b)(3)(C) — 1 case

Laurence Kaplan v. Saint Peter's Healthcare Syste, 810 F.3d 175 (3rd Cir. 2015).

— 26 U.S.C. § 4980D(b)(i) — 1 case

Eternal Word Television Network, Inc. v. Sec'y, U.S. Dep't of Health & Human Servs., 756 F.3d 1339 (11th Cir. 2014). “26 U.S.C. § 4980D(b)(i). If that is not a substantial burden on the free exercise of religion, then it is hard to imagine what would be.”

— 26 U.S.C. § 4980D(b)(l) — 14 cases

Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013). “, 26 U.S.C. §§ 4980D, 4980H; 29 U.S.C. §§ 1132 , 1185d.”

Univ. of Notre Dame v. Kathleen Sebelius, 743 F.3d 547 (7th Cir. 2014).

Roman Catholic Archdiocese v. Sebelius, 987 F. Supp. 2d 232 (E.D.N.Y 2013).

— 26 U.S.C. § 4980D(c) — 1 case

— 26 U.S.C. § 4980D(d) — 1 case

Ave Maria Found. v. Sebelius, 991 F. Supp. 2d 957 (E.D. Mich. 2014). “See 26 U.S.C. §§ 4980D(a), 4980H(a). Although smaller employers need not sponsor a health plan, if they elect to do so, the government asserts that their health plans must also meet the minimum coverage requirements.”

— 26 U.S.C. § 4980D(d)(1) — 1 case

Annex Med., Inc. v. Kathleen Sebelius, 769 F.3d 578 (8th Cir. 2014).

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.