Many employers are continuing to struggle with Affordable Care Act (ACA) compliance. And it’s no wonder as many facets of the ACA law have either been changed, delayed or overturned since the law’s inception. But make no mistake: certain employers are still obligated under current ACA law to comply with offering healthcare coverage to their employees and, separately, reporting such coverage to the IRS annually. Further, employers should be aware that the IRS is reportedly tracking employer compliance with ACA law and sending notices/letters to employers regarding their compliance – or lack thereof – with ACA law. If an employer receives an ACA notice or letter from the IRS, it should not be ignored.
Employers with 50 or more full-time and full-time-equivalent employees are referred to by the IRS as “Applicable Large Employers” (ALEs) under ACA law. ALEs have significant responsibilities with regard to the ACA, including filing ACA compliance reporting forms 1094-C and 1095-C with the IRS under Internal Revenue code (IRC) Sections 6721 and 6722 as required by law. Among other activities, it appears the IRS is calculating penalty assessments allowed within these two IRC Sections for ALEs based on the number of W-2s an ALE files with the IRS as compared to the number of 1094-C and 1095-C forms that employer files – or doesn’t file. These IRC penalties are separate from the IRC Section 4980H penalties employers are assessed for failing to offer the required ACA healthcare coverage.
Any employer who receives an ACA notice/letter from the IRS is strongly encouraged to contact their accounting firm for assistance in responding to the notice. Responding to the notice/letter can be complex; and it is critical that the response to the IRS be done correctly, thoroughly and within the time frame set forth in the notice/letter.
For more information regarding this matter, please contact Lisa Mrkall, CPA, MBA, Senior Tax Manager at Tronconi Segarra & Associates LLP. She can be reached at or 716.633.1373.