Employers have been tasked with complying with the Affordable Care Act (ACA), but many have bought into the notion that it won’t be enforced or it will be repealed before any enforcement actions begin. IRS Letter 5699 gives the employer choices on how to respond regarding their filing situation. The letter asks the employer if they:
- Filed the forms under a different EIN. (They are asked to provide the name, EIN and date for when the returns were filed).
- Should have filed the forms, but did not. (They are asked to either submit the delinquent forms with the response, or provide an explanation of when the returns will be electronically submitted).
- Were not an ALE, and thus not required to file.
- Had an “Other” reason to not file.
These letters have been going out to employers whom the IRS identifies as potential non-filers of the required ACA Information Returns (Form 1094-C and 1095-C). On the June 6, 2019 IRS Payroll Industry call, the IRS identified that for the 2016 tax year, 8,194 letters were mailed to employers. This went up to 8,752 letters for tax year 2017. Those letters were to be sent between May 15, 2019 and July of 2019.
Even if an employer complies with the requirement to offer compliant coverage to required individuals, failure to file the required forms will result in penalty. For 2019, that’s $540 per eligible employee. Read more about IRS enforcement of the ACA here.