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ACA Penalty Letters: What they are, and what to do if you get one
It’s no secret that IRS enforcement is ramping up. With an additional $80 billion in funding and 87,000 new agents, employers should accept the fact that ACA penalties could be coming their way if they’ve neglected the requirements of the ACA’s Employer Mandate.

Under the Employer Mandate, Applicable Large Employers or employers with 50 or more full-time employees and full-time equivalent employees must:

  • Offer Minimum Essential Coverage to at least 95% of their full-time employees (and their dependents) whereby such coverage meets the Minimum Value
  • Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability

Organizations that fail to meet these requirements and have at least one employee obtain a Premium Tax Credit from a state or federal health exchange could be hit with ACA penalty letter 226J from the IRS. And since ACA enrollment and the issuance of subsidies are on the rise, employers need to prepare. But if your clients with employees have already received one of these notices, what exactly can you do?

ACA Penalty Letters: What they are, and what to do if you get one

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