Regulatory Resources
The Internal Revenue Service has provided answers to common questions about the employer mandate and potential penalties.
Here are updated questions with summarized answers:
Q: How does an employer know that it owes an employer shared responsibility payment?
A: 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 applicable large employer if it determines that, for at least one month in the year, one or more of the applicable large employer’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the applicable large employer did not qualify for an affordability safe harbor or other relief for the employee).
Q: Does an employer that receives a Letter 226J proposing an employer shared responsibility payment have an opportunity to respond to the IRS about the proposed payment, including requesting a pre-assessment conference with the IRS Office of Appeals?
A: Yes. Applicable large employers will have an opportunity to respond to Letter 226J before any employer shared responsibility liability is assessed and notice and demand for payment is made. Letter 226J will provide instructions for how the applicable large employer should respond in writing, either agreeing with the proposed employer shared responsibility payment or disagreeing with part or all or the proposed amount.
Q: How does an employer make an employer shared responsibility payment?
A: If, after correspondence between the applicable large employer and the IRS or a conference with the IRS Office of Appeals, the IRS or IRS Office of Appeals determines that an applicable large employer is liable for an employer shared responsibility payment, the IRS will assess the employer shared responsibility payment and issue a notice and demand for payment, Notice CP 220J.
Q: When does the IRS plan to begin notifying employers of potential employer shared responsibility payments?
A: For the 2015 calendar year, the IRS plans to issue Letter 226J informing applicable large employers of their potential liability for an employer shared responsibility payment, if any, in late 2017.
Follow this link to the IRS FAQ about the employer mandate.
Follow this link to review the complete answers to updated questions about the employer mandate and potential penalties. (Questions 55 through 58)
For more information on the employer mandate, follow this link.