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Free Rider Penalty Flowchart

Will You be Impacted by the Free Rider Penalty?

There are still open questions about the Free Rider Penalty not addressed by the proposed regulations. The flowchart below provides a practical starting point for employers to assess how their current plans may be impacted by the Free Rider Penalty using the rules set forth in the proposed regulations for the penalty.

The interpretations below are based on our current understanding of the statutory language and the proposed regulation.  Other interpretations may be equally valid.  In other words, the following flowchart is not meant to provide all of the information an employer will need to comply with the Free Rider Penalty. To learn more about the Free Rider Penalty, click here.



American Fidelity Assurance Company does not provide tax or legal advice.


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