IRS Penalties Are Being Issued

healthThe Internal Revenue Service is finally issuing penalty letters to employers who failed to provide health coverage, in compliance with the employer shared responsibility provisions of the ACA, for the 2015 tax year. Some letters may describe a no coverage excise tax while others may assess an excise tax for failure to provide “adequate or affordable” coverage. The notices are catching many employers off guard because issuance of these letters was delayed several times.

Those who receive a letter describing the specific violation, could be liable for penalties ranging from $2,080 to $3,480 per affected employee, depending on the violation and the plan year involved. Regulatory experts recommend that employers refer to the data submitted on forms 1094-C and 1095-C and respond to the IRS on time, even if they don’t believe the tax is owed.

self-funding-video

Updated Model CHIP Notice Available for Employers

Checklist-225An updated model notice is now available for all employers that provide group health coverage in states with premium assistance through Medicaid, or the Children’s Health Insurance Program (CHIP), to inform employees of potential opportunities for assistance in obtaining coverage.

The employer CHIP notice must be furnished to all employees annually before the start of each plan year. An employer may provide the notice concurrent with the furnishing of:

  • Materials notifying the employee of health plan eligibility;
  • Materials provided to the employee in connection with an open season or election process conducted under the plan; or
  • The summary plan description.

The updated model notice includes information on how employees can contact their state for additional information and how to apply for premium assistance, with information current as of January 31, 2016.

Check out our Benefits Notices Calendar to learn about other federal notice requirements and to download additional model notices available for employers and group health plans.