By Jen Carsen, JD
A “Limited Non-Assessment Period” (LNAP) is the IRS’s fancy way of describing one or more months that don’t really count for purposes of the play-or-pay penalties under the Affordable Care Act (ACA).
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Here are six situations that may qualify as LNAPs. The first five qualify as LNAPs only if the employee is offered health coverage by the first day of the first month following the end of the period, and they are LNAPs for section 4980H(b) purposes only if the offered health coverage provides minimum value.
- First part of first year as ALE: January through March of the first calendar year an employer counts as an ALE = LNAP, but only for an employee who was not offered health coverage by the employer at any point during the prior calendar year. If you were considered an Applicable Large Employer (ALE) in 2014 (even though there were no play-or-pay penalties issued for 2014), then 2015 is not considered your first year as an ALE.