The coronavirus pandemic has caused an additional 3.84 million job loss claims, totaling over 30 million
since the pandemic began in mid-March. As part of the worst employment crisis in U.S. history, jobless
claims hit almost 7 million for the week of March 28th and have been declining each week since.
Continuing job loss claims rose to 18 million, which was a rise of over 2 million from the previous week.
This surge of unemployment is due to attempts at containing the coronavirus spread. Some states and
municipalities are beginning to open their economies back up, most of the U.S. infrastructure remains
on lockdown. The unemployment filings are extensive and causing trouble for state office claims filers
with so many pending applications. The Economic Policy Institute early this week estimated that the
current unemployment claims level is most likely undercounted by over 10 million because there are
eligible citizens unable to file due to obstructions preventing them from filing.
We believe this may be incredibly important regarding the Affordable Care Act. With health insurance
usually being tied to one’s employer, you can make the case that a large portion of the newly jobless 30
million US citizens may be applying for coverage through the Health Exchange if they are unable to find
new jobs. This means that the IRS will be more motivated than ever to assess and assign as many
penalties as possible to recoup the lost money from providing subsidized healthcare. Additionally, these
layoffs may confuse employers because they will think their ALE status might be lost when they go
below 50 employees, but a common misconception about the ACA is your filing status is actually based
on the previous year’s ALE status. This means that organizations who drop below 50 full time equivalent
employees during the COVID-19 crisis will still be on the hook for reporting requirements for the 2021
filing date and may not know it.
It is important to stay informed on your groups ALE status, and other ACA filing requirements, because
the last thing any organization needs right now during this crisis is to receive a hefty l226J penalty letter
from the IRS for hundreds of thousands of dollars.
https://www.cnbc.com/2020/04/30/us-weekly-jobless-claims.html