Non-compliant Employers Beware
If you’ve been wondering whether or not the IRS would ever actually get around to imposing penalties for employers who do not comply with the Affordable Care Act (ACA), well wonder no more.
Regarding ACA employer compliance on the IRS website’s Frequently Asked Questions page, question 58 that reads, “When does the IRS plan to begin notifying employers of potential employer shared responsibility payments?” has been answered.
The IRS answer: “For the 2015 calendar year, the IRS plans to issue Letter 226J informing ALEs of their potential liability for an employer shared responsibility payment, if any, in late 2017.
For purposes of Letter 226J, the IRS determination of whether an employer may be liable for an employer shared responsibility payment and the amount of the potential payment are based on information reported to the IRS on Forms 1094-C and 1095-C and information about full-time employees of the ALE that were allowed the premium tax credit.”
That pretty much settles it. Time is running out for non-compliant Applicable Large Employers (ALEs). For those ALEs that chose not to report or not to comply with ACA, IRS penalties and assessments are coming.
IRS Penalty/Assessment Process
On the IRS web site page, “Understanding your Letter 226-J,” the IRS continues to explain the penalty/assessment process coming in late 2017:
“Letter 226-J is the initial letter issued to Applicable Large Employers (ALEs) to notify them that they may be liable for an Employer Shared Responsibility Payment (ESRP). The determination of whether an ALE may be liable for an ESRP and the amount of the proposed ESRP in Letter 226-J are based on information from Forms 1094-C and 1095-C filed by the ALE and the individual income tax returns filed by the ALE’s employees.”
What to do if your company receives a Letter 226-J:
- Read the letter and attachments carefully. The received information that was used to compute the penalties and the response process are explained.
- Read the steps to be taken (whether you agree or disagree that you should pay the IRS penalty).
- Read the explanations on the response form.
- Respond by the deadline data provided.
It’s Not Too Late
There’s still time for concerned employers to contact a third-party provider, such as ACA-Track™, to take steps toward compliance. Whether you need full tracking and reporting, reporting only or you have an XML file you need to file electronically with the IRS, ACA-Track has the service option and pricing that fits your business or organization. And with your dedicated account manager, ACA-Track makes compliance and reporting easy and confident.
Click here to schedule a no-obligation demonstration of ACA-Track.