The IRS maintains a very comprehensive Frequently Asked Questions (FAQ) document regarding ACA compliance for employers and until yesterday they had been silent regarding the enforcement of employer mandate penalties. That now has changed, and employers should expect to begin seeing penalty letters in November and December of 2017. These first letters will be for the enforcement of 2015 ACA penalties and will begin their efforts to audit compliance.
So with this update we now know a few things:
- Is the IRS going to enforce the ACA employer mandate penalties?
- Yes, beginning with the 2015 reporting submitted by employers.
- When will they begin enforcing for the 2016 calendar year reporting for ACA?
- We expect this to begin in the early part of 2018.
- How will employers be notified?
- This will be done through a letter called “Letter 226J” which will include all of the details about what penalties you will be responsible for paying. You can learn all about ACA penalties from this link on our website.
- What will be included in the IRS letter?
- These letters will also include a Form 14765 which will outline in detail the month that employees received tax credits for reduced health premiums from the exchange and will therefore mean the employer will own a shared responsibility payment/penalty.
We are still helping employer with their 2015 and 2016 prior year reporting, and still accepting clients for 2017. So please let us know if we can be of assistance. Also you can visit the IRS updated FAQ and see all of the details from this link.