What to do if the IRS sends an ACA non-compliance notice in error

The Internal Revenue Service is beginning to send out Employer Shared Responsibility Payment notices to employers that it believes failed to comply with the ACA coverage requirements in 2015 calendar year.

Some employers receiving these notices actually complied with the ACA requirements in 2015, but the IRS received inaccurate or incomplete information and has thus incorrectly identified these employers as failing to satisfy the ACA coverage requirements.

If an employer receives an ESRP notice, the employer must dispute the IRS penalty within 30 days of the date of the notice.

We have seen employers receiving very large fines for periods in which they actually complied with the ACA coverage requirements. Accordingly, all employers that were subject to the ACA coverage requirements in 2015 should review their 2015 ACA filings (on Form 1094-C) to determine who at the company will receive the ESRP notice from the IRS; and make sure the contact address is correct. For reference, see Part 1; Lines 1 thru 8 of Form 1094-C).

If any of the contact information on the Form 1094-C is inaccurate or if the contact person is no longer employed by the company, the employer should consider updating its contact information with the IRS.

Bret Busacker
Busacker is a partner at Holland & Hart LLP.

IRS Delays 1094/1095 Reporting

 January 31st, 2016 for statements given to employees/individuals and February 29th for transmittal's filed to the IRS (and WAS March 31st if you are filing over 250 employee statements to employees).  Keep in mind, this is the information that the IRS will use to penalize the individual or the employer if they are not offering appropriate and affordable coverage and is used by the individual when preparing their personal tax returns. 

Now, the IRS announced that it will be giving employers additional time.  According to Notice Notice 2016-4, the IRS is delaying filing deadlines to allow employers, insurers and other providers additional time to get information together for the reporting.  The NEW deadlines are:

• Statements given to employees/individuals is now March 31, 2016 (Two Additional Months)

• Transmittal's filed to IRS (Paper) is now May 31st, 2016 (Three Additional Months)

• Transmittal's filed electronically in now June 30th, 2016 (Three Additional Months)

Hope you find this information helpful and Happy New Years!

Who Reports What to the IRS and Employees under Section 6055 of the ACA?

Beginning this year and filing in 2016, employers, insurers and the insurance marketplace will be required to file forms to employees and/or the IRS indicating who had health insurance coverage and when during 2015.  The filing deadline for employers is January 31st, 2016 for statements given to employees/individuals and February 29th for transmittal's filed to the IRS (March 30th if you are filing over 250 employee statements to employees).  This is the information that the IRS will use to penalize the individual or the employer if they are not offering appropriate and affordable coverage and is used by the individual when preparing their personal tax returns.  

The big question is:  Are you as an employer responsible for filing these forms?

From irs.gov.........The Affordable Care Act added section 6055 to the Internal Revenue Code, which provides that every provider of minimum essential coverage will report coverage information by filing an information return with the IRS and furnishing a statement to individuals.


The answer is: yes and no  

If you have less that 50 full time equivalent employees and fully-insured then the health insurance carrier is responsible for the transmittal that is sent to the IRS (Form 1094B) and the Statement that is sent to the individual employee for their taxes (1094C).

If you have less than 50 full time equivelant employees and are self-insured, the employer is responsible for filing the Transmittal to the IRS (Form 1095B) and the  Statement to the employee (1095C)

If you are fully-insured or self-insured with over 50 full time equivalent employees then the employer is responsible for filing the Transmittal to the IRS (Form 1095B) and the Statement to the employee (1095C).

As a side-note, people with individual coverage directly with an insurance carrier or through the exchanges will receive a statement on form 1095A from either the Insurance Marketplace (Exchange) or from the Carriers.