IRS to Begin Enforcing ACA Employer Penalties

IRS to Begin Enforcing ACA Employer Penalties

On October 25, the Financial Times reported the Internal Revenue Service (IRS) will begin enforcing penalties for employers that have not complied with the ACA employer mandate. According to the article, “within weeks”, over 100,000 employers could receive notices informing them of their fines. Employers must raise objections within 30 days of receipt of a letter.

Earlier this year, a report from the Treasury Inspector General for Tax Administration (TIGTA) indicated that the IRS was developing automated tools for identifying large employers who were out of compliance with the employer mandate. But it appears the effort to implement these tools was delayed. According to the Financial Times article, the Treasury lawyers recently determined the enforcement of these penalties could no longer wait.

The IRS has also recently shared the penalty notification letter it will be using to inform employers of their related fines. In the coming days, Health e(fx) expects to templates for Forms 14764 and 14765, which employers will use to respond to IRS notifications, to be released.

While 2015 and 2016 tax seasons were ACA information reporting “good faith” years, this relief (see question 3) is only provided under certain circumstances and penalties can still be applied. The IRS has not released an official communication regarding whether good faith relief will be available in 2017.

To help employers understand their responsibilities under the Employer Mandate, the IRS recently updated the Questions and Answers on the Employer Shared Responsibility Provisions (Employer Mandate).


Key 2017 Tax Year IRS Reporting Deadlines:

January 31, 2018
Form 1095-C must be postmarked or delivered to employees

February 28, 2018
Employers who choose paper filing must postmark their forms by this date

April 2, 2018
Employers who choose e-filing must submit their forms by this date


Health e(fx) is Built for IRS Defense
Health e(fx) is built to help employers actively manage their ACA compliance, including supporting accurate monthly coding all ACA IRS forms.

The Health e(fx) ACA compliance system is built to contain the information required to defend against ACA shared responsibility penalties and to help you respond on a timely basis. For organizations that choose Health e(fx) Managed Services, we will run applicable reports and work with you to process and resolve the IRS correspondence.

Health e(fx) was uniquely built for active management of ACA compliance and audit defense. It’s important to regularly manage your data and compliance within the system to avoid these potentially massive penalties. We’re here to help answer your questions on our system capabilities.