IRS to Start Issuing Employer Mandate PenaltiesNovember 9, 2017
By the end of 2017, the IRS plans to start issuing the first round of ACA employer mandate penalty notices (§4980H penalties), using employer-reported 2015 Form 1095 information.
The recently updated IRS FAQs include information regarding the penalty notice and payment process. The FAQs explain that Letters 226J will be sent to “applicable large employers” with employees who received a premium tax credit in 2015. The letter will indicate that either the employer did not (1) offer coverage to at least 95% of its full-time employees or (2) indicate an affordability safe harbor code for an employee who received a tax credit.
Employers have up to 30 days to respond to the notice. It is expected that at least some IRS penalty notices will be sent incorrectly. If you receive an IRS Letter 226J penalty notice, please contact your Keller account team for assistance.