On the heels of the HHS’ notice letters to employers about ACA premium subsidies their employees may have received, the IRS has begun issuing its own ACA compliance letters. The biggest difference: The IRS notices come with penalties attached.
The IRS letters are the first phase of its ACA enforcement efforts and could eventually lead to a full-scale ACA verification audit.
Employers should be on the lookout for these letters and respond as soon as possible.
IRS has previously said that following the initial letter employers will have the opportunity to appeal the penalty.
As you are well aware, if an employee isn’t offered minimum value coverage and receives a premium subsidy on the ACA exchanges, his or her employer is subject to a $3,000 per-employee penalty.
The first notices employers received about employees receiving ACA subsidies were likely to come from the HHS. That agency began issuing the notices earlier in the summer.
When it comes to HHS notices, employers have a number of specific options at their disposal if they feel the information is inaccurate.
The first step is to appeal to HHS and let the agency know that your company offered ACA-compliant coverage. Once employers receive a notice, they have 90 days to appeal, and the agency posted a specific appeal form on HealthCare.gov, which can be found here.
While it’s a good idea to respond to any notices by the feds regarding ACA compliance, legal experts are urging employers to remember the IRS is the only agency that actually imposes ACA penalties.
So employers will probably want to make responding to the IRS priority No. 1.