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IRS Prepares to Enforce ACA Employer Mandate

The IRS has announced its intent to begin enforcing the employer-shared responsibility provisions (otherwise known as the employer mandate or pay-or-play provisions) of the Affordable Care Act for the 2015 calendar year. The IRS also published a template letter that it will mail to any applicable large employer (ALE) if it determines the ALE owes payments under the employer mandate for one or more employees for any month. The agency also will send an explanation to ALEs detailing what to do if they receive the letter.

The letter will include:

  • A table that itemizes the proposed assessment month-by-month

  • An "employee premium tax-credit list," which identifies each employee for whom a payment is due

  • A description of the actions the ALE should take if it agrees or disagrees with the proposed penalty payment

  • A form for responding to the assessment

  • The name and contact information of an IRS agent assigned to answer any questions

ALEs who agree with the IRS's calculation may pay the amount requested. ALEs who disagree with the assessment can respond by providing proposed changes and an explanation of their disagreement. Responses will be due by the response date specified on the form, generally about 30 days from the date of the letter.

These enforcement efforts are expected to begin in the next couple of months. Regardless of whether employers expect to owe an assessment for 2015, they should look for a letter and be prepared to respond promptly. As always, it is prudent to exercise caution to ensure that the letter is from the IRS and not part of a phishing scheme.

Changes to the ACA are coming and other laws and regulations affecting health care and health benefits can be expected. 

Copyright © by Ballard Spahr LLP

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About this Author

Edward I. Leeds, Philadelphia attorney, Ballard Spahr Law firm, Employee Benefits and Executive Compensationattorney
Counsel

Edward I. Leeds concentrates on issues relating to the design, administration, and taxation of health and other welfare benefit plans. His practice has evolved with the laws and market forces that shape those plans. Mr. Leeds advises clients about compliance with the Affordable Care Act, HIPAA, HITECH, COBRA, cafeteria plan rules, and other legal requirements. He prepares clients for audits of their privacy and security measures under HIPAA and advises them about the rules governing wellness initiatives.

Mr. Leeds represents employers in the negotiation and drafting of contracts...

215.864.8419
 Jean C. Hemphill, LAWYER at Ballard Spahr, Philadelphia, Health Care, Employee Benefits and Executive Compensation, Exempt Organizations, Health Care Reform

Jean C. Hemphill is the Co-Leader of Ballard Spahr's Health Care Group. Ms. Hemphill has a general corporate and regulatory practice, specializing in health care, employee benefits, and nonprofit law. She represents academic medical centers, medical schools, health systems, physician practice groups, clinical laboratories, social service agencies, pension and welfare plans, employers, business groups, and other entities. She is also active in higher education matters.

Before joining Ballard Spahr in 1997, Ms. Hemphill was Vice President and General Counsel of the Board of Pensions of the Presbyterian Church (U.S.A.), the entity administering the pension, medical, disability, and death benefits plans for the ministers and lay employees of the Presbyterian Church. She continues to serve as General Counsel for the Board and as legal counsel to numerous other denominational benefits programs.

Ms. Hemphill is a frequent lecturer on health, employee benefits, and nonprofit law subjects, including most recently the Patient Protection and Affordable Care Act,Medicare Part D compliance, HIPAA privacy and security matters, fraud and abuse, compliance, fiduciary duties of directors and officers, and other governance issues for tax-exempt organizations.

215.864.8419
Laura Heacock, Ballard Spahr Law Firm, Finance, Labor and Employment Attorney
Associate

Laura P. Heacock focuses her practice on all areas of employee benefits and executive compensation. She advises clients on issues relating to the design, administration, and taxation of health and other welfare benefit plans and about compliance with the Affordable Care Act, HIPAA, HITECH, COBRA, cafeteria plan rules, and other legal requirements. Ms. Heacock prepares clients for audits of their privacy and security measures under HIPAA and advises them about the rules governing wellness initiatives, and has experience conducting HIPAA trainings that focus on compliance...

215-864-8864