IRS Finally Issuing Affordable Care Act Fines

Hey Folks

The IRS is finally getting serious about ACA fines for business who aren’t abiding by the regulations put in place under Obamacare.

They have started sending out Letter 226-J, an official notice of the business being fined. This letter has been delayed repeatedly since Obamacare went into effect - back in 2014 - and as such, businesses may receive fine alerts for multiple years.

Depending on the type of business and the exact reason for the fine, businesses could be facing fines from $2080 to $3480 per affected employee.

In an official announcement about the letters, Karen McLeese, vice president of employee benefit regulatory affairs at CBIZ, says the ALE would need to respond to the IRS within the timeframe specified in the letter – generally, within 30 days – either affirming that it agrees that the excise tax is due, or that it does not believe the excise tax is due.

“The employer’s response is accomplished by filing a Form 14764, ‘ESRP Response,’ to the IRS,” McLeese says. “The IRS will then send acknowledgement of the ALE response by sending Form 227 if ALE disagrees with the proposed payment amount contained in Form 227.”

Letters are being sent out this week.

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