IRS ACA PENALTY ASSESSMENTS ARE FORTHCOMING

Applicable large employers (ALEs) should keep an eye out for letters from the IRS assessing pay or play penalties for the 2015 calendar year.

Many employers have already received notifications from the Health Insurance Exchanges notifying them of employees who received subsidized coverage through the Exchange. Unlike the letters that are forthcoming from the IRS, the Exchange notifications were not assessing penalties or notifying employers of their potential liability for penalties.

In addition, the letters from the IRS are targeted only to ALEs, and only to those that the IRS has determined may be liable for pay or play penalties. The Exchange notifications went to any employer (ALE or non-ALE) that employed an individual who received subsidized Exchange coverage.

ALEs may want to consider the process by which they will handle any forthcoming letters from the IRS notifying them of their potential liability for penalties. For example, consider the specific point person or department that these letters should be directed to, and the process for determining whether the ALE should appeal the penalty liability notification.