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Affordable Care Act & IRS Regulations: Are You Paying Attention?

Posted by: on September 13, 2017 in Corporate News Human Resources PEO


With the Affordable Care Act (ACA) still hanging on in Congress, its fate is still up in the air. In the meantime, the ACA remains law, and the Internal Revenue Service (IRS) continues to seek out and identify employers who are not compliant with the law. Until a final decision is made regarding the ACA, employers must remain in compliance to avoid potential penalties.

imageKeeping up with the status of the ACA has been confusing, to say the least. The ACA is here to stay for now, so yes, employers do need to comply and complete reporting per IRS guidelines. Employers have begun seeing inquiry letters from the IRS, and many are unsure if they require action or not. The IRS inquiry letters can be difficult to understand, and some have even been reported as fraudulent. Employers may also receive resubmittal requests that were sent in error. Regardless, it’s important to sort through each and every inquiry, and determine the course of action needed next.

Your HR Consultants should have the expertise and resources to deal with IRS inquiries and help your company stay in compliance. Having a reliable team who can stay on top of ACA compliance is crucial. There are three common letters that are sent to employers by the IRS, though additional inquiries may be sent out as well.

Missing Employer Reporting: This letter would be sent out if your company was considered an Applicable Large Employer (ALE), having 50 or more full-time or full-time equivalent employees in 2015, but the information returns for the 2015 tax year for forms 1094-C and/or 1095-C are missing or were improperly submitted.

Corrections and Resubmittal of Forms: In the event your company filed an incomplete return or used an incorrect format for filing, this letter may arrive. This inquiry has been reported by some employers as being sent in error, so it’s important to utilize the contact information in the letter, and confirm that corrections and resubmittal are in fact necessary.

Employer Shared Responsibility Payments Confirmation: If an employer, or someone in their behalf, made an inquiry to the IRS regarding ACA reporting and compliance obligations or potential fines, some variation of this letter is usually sent out. This letter simply confirms that yes, ALEs are still required to follow the legislative provisions of the ACA, until further notice. No action is required, other than simply confirming with your PEO Service or Human Resources that your company is in compliance.

imageThough President Trump’s Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal intends to significantly reduce any fiscal burdens resulting from any requirements of the ACA, employers are still required to comply fully, and it seems the IRS is even increasing efforts to seek out non-compliant employers. Failure to correctly respond to IRS inquiries can result in penalties anywhere from $260 per late form up to $520, with a $3,178,500 maximum penalty assessment for late forms, and no maximum penalty assessment for forms left unfiled. That’s a burden that no employer wants to take on.

Emplicity understands that HR Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.

NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients.