Responding to IRS ACA Penalty Notifications
Hello again,
This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. We hope you find it useful.
The IRS is currently sending out penalty notifications, and if your company receives Letter 5699, Letter 226J, or Letter 227, it’s important to respond in a timely manner. Accurate record keeping allows you to provide proof of compliance.
Letter 5699 is also called the “Missing Information Return Form 1094/1095-C” notice. It is issued to Applicable Large Employers who the IRS believes have not filed a 1094-C and 1095-Cs for a specific tax year.
This letter is a warning notification, and you may need to provide confirmation that the forms have been filed. If you have not filed, you may need to state your intent to file immediately or provide a valid explanation. For example, your company may not actually be an ALE.
Failure to file forms to employees, or provide the required information may result in costly penalties.
Letter 226J is a penalty notification for ALEs who did not offer affordable coverage to full-time employees or failed to offer Minimum Essential Coverage to at least 95% of full-time employees.
Letter 227 is not a bill, but provides payment options and offers next steps for appealing Letter 226J.
Affordable Care Act penalties are often the result from these common mistakes: Employee classification errors, inaccurate coding, failure to meet the Affordability Threshold, filing errors due to incorrect data formatting.
Manual tracking can be prone to errors, and comprehensive ACA software streamlines data management and easy data retrieval for responding to IRS notifications.
Passport Software
If you are underwhelmed with your current provider, our affordable ACA software and services can help you maintain compliance year-round.
ACA Full Service is the easiest option, just provide a simple spreadsheet with employee data, and we do the rest, including filing:
- Signed and countersigned HIPAA agreement, initial data entry/importation, set up company information, import employee information, import payroll hours data (if required)
- Generate employee Affordable Care Act records to track offers and reporting of coverage, consultation to set up Safe Harbors and Measurement Periods
- IRS TIN (SSN) Matching to prevent AIRTN500 errors, electronic (PDF) 1095-C Validation drafts
- Send Employee 1095-C copies to the employer for redistribution, electronic (XML) filing with confirmation from the IRS, notification of errors reported by the IRS
Our Full Service option provides monthly/quarterly monitoring services if needed.
Passport Software’s IRS-certified ACA software helps you simplify and comply year-round. Our software requires a one-time purchase price with a nominal annual update fee. And, you have the option to have Passport proxy file on your behalf for an additional fee. Here’s a helpful video: From Spreadsheet to Ready to File in 10 Minutes
We also provide penalty response consultation services and have helped many companies avoid or drastically reduce penalties.
To learn more about how our ACA software and services can ease the burden of compliance, call 800-969-7900. Or, contact us – we are here to help.