The IRS has issued a sample Letter 226J that will start going to Applicable Large Employers (ALEs) that had a full-time employee receive a Premium Tax Credit (PTC) and that employee was not offered affordable and adequate health insurance.
Employers will receive the letter based on how their 1095-Cs were filed, meaning, if there wasn’t an applicable safe harbor code on line 16 and a full-time employee received a PTC, the IRS will issue Letter 226J to the employer. Therefore, it is extremely important for employers to never leave line 16 on the 1095-C blank, unless a blank is applicable. Page three of the sample 226J letter notes:
About the Form 14765, Employee PTC Listing
The Employee PTC Listing shows the name and truncated social security number of each full-time employee for whom you filed a Form 1095-C if:
The IRS recently revised their FAQs on the ESRP under the ACA. Click here to learn more about how the IRS will be enforcing the “pay or play” employer penalties. It’s important to note that employers will have 30 days from the date of the letter to respond back to the IRS. It is probable that by the time the letter gets to the employer, the employer will only have three weeks left to respond. Since the IRS has now taken steps to start issuing the employer mandate, employers need to be prepared to respond to these notices quickly. Assistance in responding to these notices is advisable.
Contact your Eide Bailly professional or our health care reform team, with questions or for assistance in completing or reviewing your ACA compliance requirements.