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ACA Penalty Letters Are On The Way

Remember a few years ago when the big ACA question for employers was to decide if they would play or pay?  Well the IRS has just announced they will begin sending out Employer Shared Responsibility Payment (ESRP) penalty letters. So it looks like we are about to see just how much the threatened ACA penalties will actually impact employers across America.

Penalties are for 2015

This first round of penalty letters are actually for the ACA forms that were filed for the 2015 tax year. The letters are supposed to be sent out by the end of the month and for anyone that gets really excited about reading IRS Notices here’s an example IRS 226J Letter.

Will I Get a Notice

As long as you completed your filing and offered minimum essential coverage you shouldn’t receive anything.  However, this is a new process and it has taken the IRS almost two years to process the 2015 filings. This long timeframe is no surprise when you consider the complexities involved with employer ACA compliance.  

What you Should Know

If you do happen to receive one of these letters it is not a demand for payment. Instead, it’s a chance to respond with your filing documentation.  If you get a notice the most important thing to do is to gather your supporting documentation and respond quickly.


If you need to learn more about ACA, ESRP or if you're just curious about the penalty letter the IRS has been kind enough to provide several resources. The links to these resources are listed below:

 ACA Information Center For Applicable Large Employers

 Employer Shared Responsibility Provisions

 Sample Letter 226-J

 Understanding Your Letter

About the Author

Darlene Tysinger is the President of AdvaPay Systems. Darlene and her team work with businesses of all sizes to simplify their HR processes and payroll compliance.