Although the main provisions of the Affordable Care Act (ACA or "the Act") became effective January 1, 2015, many employers are still struggling to comply with the law. With so many complex rules and provisions regarding measuring, tracking, and reporting, it's no surprise that many employers are making mistakes in their ACA compliance efforts.
The full extent of these mistakes is just now becoming known, as the IRS recently issued a Letter 226-J to employers whom the IRS has determined owe an employer shared responsibility payment (ESRP) for the 2015 reporting year.
The amount owed by these employers varies widely, but proposed payments in the millions of dollars are common, with reports of one proposed payment as high as $59 million dollars.
Employers who receive a Letter 226-J should carefully consider working with an experienced third-party vendor who can help the employer prepare their response to the IRS.
While working with a qualified tax attorney or other tax advisor may be advisable as part of the response process, it is unlikely that these individuals or firms have the practical experience needed to perform the type of review required to respond to a Letter 226-J accurately. Therefore, employers should consider working with an experienced ACA compliance vendor who has a strong track record of producing accurate ACA compliance results for their clients.
An experienced and qualified vendor can help an employer review the employer's data and records to recalculate measurement outcomes and eligibility determinations to ensure 100 percent accurate results to compare against IRS findings. Working with this type of vendor can help bring peace of mind and potentially save the employer from millions of dollars in financial penalties.
UnifyHR is one of the nation's premier ACA administrators. While we offer comprehensive and reporting-only services to help employers meet their ACA compliance obligations, we also offer stand-alone Letter 226-J support services. We've already helped several employers respond to the IRS, and we can help you too.