IRS Notice 1094C-031-01 is sent to employers who are suspected of not offering health plans that meet the minimum value standard set by the Affordable Care Act (ACA). This notice signifies the IRS’s intention to assess penalties unless the employer can demonstrate compliance.
Understanding the Minimum Value Standard
The minimum value standard requires that an employer’s health plan must cover at least 60% of the total allowed cost of benefits expected under the plan. It also needs to include substantial coverage of hospital and physician services. Employers who fail to offer such plans to their eligible full-time employees might receive this notice.
Steps to Take After Receiving Notice 1094C-031-01
- Confirm the accuracy of the IRS findings by reviewing your health coverage offerings during the cited period.
- Compile evidence such as plan benefit summaries and coverage terms to refute the IRS’s claims, if applicable.
- Respond to the notice with your documentation to clarify or correct any discrepancies.
Preventive Measures
Employers can avoid future notices by:
- Ensuring that all offered health plans meet the ACA’s minimum value standard.
- Regularly reviewing plan offerings to ensure they continue to comply with ACA requirements.
- Engaging with ACA compliance software for regular audits and compliance checks.
Further Assistance
For additional support and detailed explanations of the ACA’s requirements, employers are encouraged to explore the FAQ section of ACA Track or seek advice from qualified ACA compliance advisors.
