News and Blog



Tuesday, 30 October 2018
ACA - Employer requirements are still there

With all the talk about repealing the ACA and the "individual mandate" penalty going away next year, business owners might think they are off the hook to comply with all the ACA laws. This is not the case, nothing has really changed if you have more than 50 full time equilvalent employees. 

The number one thing to be aware of is providing "qualified, affordable health insurance" is still the rule of the land and not complying can cost you dearly. The IRS is enforcing "employer shared responsibility payments" (ESRP) penalties against large employers who fail to meet the ACA requirements. 

The IRS is assessing penalties using 226-J letters

This letter explains that the employer may be liable for the penalty, based on information obtained by the IRS from Forms 1095-C filed by the employer for that coverage year and the tax returns filed by the employers employees. If an employee indicates on their taxes that the coverage offered by their employer is not affordable it can trigger the penalty by the IRS. The employer has only 30 days to respond to the 226-J letter, using IRS form 14764, which is enclosed with the 226-J letter. Not responding to the letter in the 30 day limit will result in a final assessment of the proposed penalty. 

The penalties of non-compliance can be severe. In the worst case, an employer with inadequate or unaffordable health insurance could pay for the cost of the coverage as well as penalties of $2,000/year for every full-time employees (less 30), even those who received health coverage from the employer. 

The real key here is to reply in the 30 day limit and make sure the lowest cost plan does not charge employees more than 9.56% of an employees income. 

Posted on 10/30/2018 9:42 AM by David Moore