ACA Update: IRS Releases FAQs

The IRS recently posted FAQs to its Affordable Care Act (ACA) website, outlining how the agency will notify applicable large employers (ALE’s) if they are being assessed for a penalty. The penalty notice will indicate that an assessment “will be made based, in part, on the ALE’s reporting on IRS Forms 1094 and 1095”. The letters will be for the 2015 calendar year and those being assessed will receive them before the end of 2017.

According to JDSupra:

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 ALE’s 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).


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.

For more information, please click here.