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IRS Penalty Assessments Coming this Fall

For those employers who have 50 or more equivalent employees: Now that you wrapped up the required 1095 and 1094 forms (showing that you did or didn’t offer coverage to your full time employees) and sent them to the IRS earlier this year, you may be wondering what is coming next…

Some of your employees may start receiving an IRS penalty assessment this fall. This notice would be issued if they or a member of their family accessed advanced premium tax credits from Covered California or when they were offered affordable coverage through your company (the affordable coverage clarification is confirmed through the 1095 and 1094 forms). As you may know, when you offer affordable coverage, your employees who are eligible for your plan, as well as their dependents, are not eligible for advanced premium tax credits.

Unfortunately, Covered California and don’t always make it crystal clear what an “affordable” plan is. So, you may find that many of your eligible employees will be receiving this IRS penalty notice for accepting advanced premium tax credits that they didn’t qualify for. If they receive it in error, there will be the option for them to appeal the IRS penalty in the late fall and early winter. Some of these penalties will be substantial, so it is good to have a basic understanding if you hear from your employees about this. Feel free to contact Warren G. Bender Co. if you need further clarification.

Filed under: Employee Benefits — Jillian Bender-Cormier @ 2:32 pm July 27, 2016