Content updated on November 11, 2017

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As stated back in April of this year, the IRS will begin enforcement of the Affordable Care Act (ACA) any day now. They have now published a draft of the soon to be sent Employer Shared Responsibility Payment (aka “Penalty”) notification letter. While some employers have received “non-filing” letters from the IRS already, this letter will be the first notification of employer penalties associated with not complying with the requirements of the Affordable Care Act.

Have you received an ACA “love letter” from the IRS?

In addition, the IRS has updated questions 55-58 in the “Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act” on (details below). Question 58 clearly identifies that penalty notifications for the 2015 calendar year reporting will be sent by the end of 2017. This will be a wake-up call to many in the industry that have been lulled into complacency as a result of the noise in the news over the last few months.

This Q&A section also outlines the process employers can use to appeal any assessment levied on the organization. Employers will want to ensure they have their data organized in a way that will allow them to respond to these in a timely fashion as they will typically only have 30 days to respond. Additionally, it will be important for employers to leverage their relationships with their attorney familiar with employer ACA compliance as well as their partners providing ACA reporting services and ACA-related.

Make sure that your organization is protected from these penalties. Integrity Data can help you comply with these ACA reporting requirements in a way that is easy, comprehensive and affordable while ensuring that the software remains continuously updated with any possible future changes made to the reporting mandate. Do you need help understanding ACA requirements or getting started with compliance? Learn more by signing up for our free webinar or contact us at or at (888) 786-6162.

Excerpt of questions 55-58:

55. How does an employer know that it owes an employer shared responsibility payment?

The general procedures the IRS will use to propose and assess the employer shared responsibility payment are described in Letter 226J. The IRS plans to issue Letter 226J to an ALE if it determines that, for at least one month in the year, one or more of the ALEs full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee).

Letter 226J will include:

  • a brief explanation of section 4980H,
  • an employer shared responsibility payment summary table itemizing the proposed payment by month and indicating for each month if the liability is under section 4980H(a) or section 4980H(b) or neither,
  • an explanation of the employer shared responsibility payment summary table,
  • an employer shared responsibility response form, Form 14764, “ESRP Response”,  
  • an employee PTC list, Form 14765, “Employee Premium Tax Credit (PTC) List” which lists, by month, the ALEs assessable full-time employees (individuals who for at least one month in the year were full-time employees allowed a premium tax credit and for whom the ALE did not qualify for an affordability safe harbor or other relief (see instructions for Forms 1094-C and 1095-C, Line 16), and the indicator codes, if any, the ALE reported on lines 14 and 16 of each assessable full-time employee’s Form 1095-C,
  • a description of the actions the ALE should take if it agrees or disagrees with the proposed employer shared responsibility payment in Letter 226J, and
  • a description of the actions the IRS will take if the ALE does not respond timely to Letter 226J.
  • The response to Letter 226J will be due by the response date shown on Letter 226J, which generally will be 30 days from the date of Letter 226J.

Letter 226J will contain the name and contact information of a specific IRS employee that the ALE should contact if the ALE has questions about the letter.