IRS Begins ACA Employer Reporting Penalty Process

Background

Pursuant to the Affordable Care Act (“ACA”), all Applicable Large Employers (more than 50 FTEs) must file statements with the IRS (Form 1094-C), and provide statements to their employees (Form 1095-C), regarding any health coverage offered to their employees. Failure to complete the employer reporting timely can result in penalties.

In order to begin assessment of penalties due, the IRS is currently issuing notices to Applicable Large Employers that require them to disclose whether they complied with their ACA reporting duties. This Health Care Reform Bulletin describes these notices and how to respond.

Letter 5699 Forms

Employers that failed to file their 1094-C, or furnish 1095-C statements, may receive an IRS notice called “Request for Employer Reporting Offers of Health Insurance Coverage (Forms 1094-C and 1095-C).” These forms are also known as Letter 5699 Forms, and can be issued for either the 2015 or 2016 filing years.

If an employer receives a Letter 5699 Form, it will only have thirty (30) days to complete and return the form. The form contains the following checkboxes to be completed by the employer:

• Employer already complied with reporting duties;
• Employer did not comply but encloses required forms with return letter;
• Employer will comply with reporting duties within ninety (90) days (or later, if further explained in the form);
• Employer was not an Applicable Large Employer for the year in question; or
• Other (requiring a statement explaining why required returns were not filed, and any actions planned to be taken).

The form also states, “[i]f you are required to file information returns under IRS Section 6056, failure to comply may result in the assessment of a penalty under IRS Section 6721 for a failure to file information returns.”

What to do if you receive a Letter 5669 Form

Employers that receive a Letter 5669 Form should contact their benefit consultant immediately upon receipt due to the short thirty (30) day response deadline. In some instances, it may be necessary to request an extension if an employer was unaware of its reporting obligations prior to receipt of the IRS notice. In those instances, employers may need to prepare statements to be enclosed with their responses.
If you have any questions, please contact your Exude Consultant.

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This communication is provided for informational purposes only and does not constitute legal advice. The communication contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. Please use this communication as a guide and not as a definitive description of your compliance obligations.