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IRS to Begin Collection Process for ACA's ''Pay or Play'' Penalties

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December 01, 2017

Employers who averaged 100 or more employees over the 2014 calendar year may be receiving a notice from the IRS in the coming months relating to potential penalties for failure to offer affordable coverage to full time employees for the 2015 calendar year, in violation of the ACA's Employer Shared Responsibility Mandate. In brief, employers who met the 100-employee threshold in 2014 were required to do the following in 2015:

  • Offer coverage to all full-time employees (meaning employees who worked 30+ hours/week on average); and
  • Make sure that the offer of coverage was "affordable," meaning that the employee's required contribution for self-only coverage did not exceed 9.56% of his or her income

Sample notices are available at https://www.irs.gov/pub/notices/ltr226j.pdf. If you receive anything resembling the notice, you should contact legal counsel as soon as possible - according to the IRS, the deadline to respond to and, potentially, dispute amounts owed under the notices "generally will be 30 days from the date of [the notice]," leaving employers with little time to prepare a defense.

Questions? Contact Attorney Peter Murphy in our St. Charles office at (630) 377-1554 or by email at pehansen@wesselssherman.com.

Contact:
Peter Hansen, Associate Attorney
pehansen@wesselssherman.com, (630) 377-1554