Under the Affordable Care Act, “employer shared responsibility provisions” became part of the Internal Revenue Code in 2015. These directives encourage “applicable large employers” (ALEs) – generally those with 50 or more full-time equivalent employees – to offer their employees “affordable” health insurance that provides “minimum value.” Read our blog post, Is Your Company's Health Insurance Affordable?, to determine if your health insurance plan meets the ACA criteria.
If, after evaluating the submitted forms, the IRS believes the ALE has not made adequate health insurance available to its employees, it may issue a “Letter 226-J” notifying the company of its potential liability for an employer shared responsibility payment (ESRP). The letter can be intimidating and worrisome for employers. It outlines the cumbersome steps recipients must take, regardless of whether they agree with the government’s ESRP computations.
To eliminate the possibility of a Letter 226-J and costly ACA non-compliance penalties, consider connecting with a professional employer organization (PEO). PEOs like Axcet HR Solutions unburden business owners from the headaches, paperwork, and complexities associated with HR compliance and insulate you from fines like the ESRP.