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As businesses reopen and bring workers back to offices, restaurants, and retail stores across the country, employers should take this opportunity to look at their ACA compliance programs. The IRS Office of the Chief Counsel recently issued new field advice (“Field Notice”) making it clear that there is no statute of limitations for the assessment of an Employer Shared Responsibility Payment (“ESRP”) under Internal Revenue Code Section §4980H.
Since the Employer Mandate obligations went into effect in2015 under the Affordable Care Act, many employers have questioned how diligent the IRS will be in enforcing penalties associated with the Employer Mandate. The absence of a statute of limitations means that employers can be on the hook indefinitely. The passing years will not give employers reprieve.
Under §4980H, the IRSassesses an ESRP when an employer of at least 50 full-time and full-time equivalent employees, also known an Applicable Large Employer (ALE), fails to offer health coverage to at least 95% of their full-time employees where such coverage meets certain requirements pertaining to the plan’s Minimum Value and affordability.
Reopening post-pandemic gives employers the opportunity to look at their overall ACA compliance process. For some employers, this means getting serious about instituting an ACA Compliance process and staying compliant with monthly tracking. Back in February, we discussed the importance of a monthly ACA Compliance process, which ensures monthly offers are made as they become due to avoid ESRPs.
For employers that already have a robust ACA Compliance process, they may want to take a look at their document retention policies to ensure they are prepared, should they receive a penalty letter down the road.
Employers, if you are interested in implementing a monthly ACA Compliance process, contact us to learn about ACA CompleteSM.
