If your company receives or has received a Letter 226-J from the IRS, immediate action should be taken. First, observe the response due date. Most 226-J letters require a response within 30 days of the date of the letter. Determine how much time you have to respond and plan accordingly. Determine also why you received the Letter 226-J. It could be that a portion of the 1094 was in error. There could have been a mistake on the “minimum essential coverage” designation. Review all the employees named in the letter as having received subsidies through a Health Insurance Marketplace. Check the dates of the health insurance marketplace with internal employment dates. Review for date errors. Be prepared to provide documentation in your company’s defense. Seek the assistance of legal counsel or a full-service ACA compliance and reporting service to help demonstrate a) a qualifying offer was made, but waived, or b) the employee did not qualify to receive an offer. Also, make sure your organization is getting subsidy notices. While delivery of Marketplace notices may be late coming, it is important to confirm who is designated in your organization to receive such notices, and have a standard operating procedure in place for timely follow up and resolution when needed.
For further information on the letter 226J, click this IRS link: https://www.irs.gov/individuals/understanding-your-letter-226-j
