IRS Issues Pay or Play Enforcement Guidance and Penalty Assessments

On Nov. 2, 2017, the Internal Revenue Service (IRS) updated its Questions and Answers (Q&As) on the employer shared responsibility rules under the Affordable Care Act (ACA) to include information on enforcement. Specifically, these Q&As include guidance on: 

  • How an employer will know that it owes an employer shared responsibility penalty;
  • Appealing a penalty assessment; and
  • Procedures for paying any penalties owed.

The IRS also maintains a website on understanding Letter 226-J and a sample letter, as well as a, which will be used to inform employers of their potential penalty liability.

Action Steps

No penalties have been assessed under the employer shared responsibility rules at this time. However, employers subject to these rules are still responsible for compliance. The IRS Q&As indicate that, for the 2015 calendar year, the IRS plans to issue letters informing employers of their potential liability for an employer shared responsibility penalty, if any, in late 2017.

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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.