Employer Mandate Penalties Under the ACA Are Coming Soon

John GarnerCompliance, Resources

The Internal Revenue Service (IRS) has issued answers to new frequently asked questions (FAQs) regarding employer penalties under the Affordable Care Act (ACA). These penalties apply to applicable large employers (ALEs), which are employers with 50 or more full-time employees, including full-time equivalent employees.

The first penalty letters will apply to calendar year 2015. For 2015, transition relief applied and only employers with 100 or more employees were subject to the penalties. Other forms of transition relief have the effect of reducing the amount of penalties and the number of employers subject to penalties.

The FAQs indicate that the IRS will begin sending penalty letters in late 2017 and reports are that some employers have begun to receive the letters. The IRS plans to issue Letter 226J if it determines that one or more full-time employee of an ALE received a subsidy (also known as an advance premium tax credit) for at least one month in 2015.

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