IRS Resumes Sending Out ACA Penalty Notices for 2015

The Internal Revenue Service (IRS) has begun issuing new Affordable Care Act (ACA) penalty notices for calendar year 2015.

IRS-sends-out-Obamacare-tax-penalty-noticesThe notices are officially called Employer Shared Responsibility Payment (ESRP) notices, or what the IRS refers to as Letter 226-J.

Under the ACA, Applicable Large Employers (ALEs), generally those companies with 50 or more full-time employees (or their equivalence with part-timers factored in) must provide health insurance coverage that is “affordable” and provides “minimum value” or face a fine, now known as the ESRP.

Any company receiving an ESRP notification has 30 days to dispute it, and in some — if not many — cases the IRS has in the past incorrectly identified “guilty” employers.

The IRS audits company compliance from data submitted on two forms:  ALEs are required to send health coverage information to the IRS on Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. ALEs are also required to send the Form 1095-C to each employee.

Despite an executive order by President Trump that hinted at the IRS’s not enforcing the Employer Shared Responsibility provision, the agency has announced it will enforce the provisions of the ACA with full force.

Another noteworthy provision of the ACA, the so-called individual mandate, is still in effect for calendar year 2018, but the Centers for Medicare and Medicaid Services (CMS) recently issued a rule providing broad exceptions to the mandate. The tax penalty associated with the individual mandate ends completely in 2019, thanks to a provision in 2017’s Tax Cuts and Jobs Act.

NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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