All employers are at risk of receiving a notice from the IRS
that they are liable for a penalty under the Affordable Care Act
for failing to offer enough employees insurance coverage, or for
failing to offer particular employees insurance coverage. This
alert offers a game plan to implement upon receipt of that
notice.
What You Will Receive. The notice will be
provided via an automatically-generated letter, known as
"Letter 226-J," based on (a) data received from employers
who filed Forms 1094-C and 1095-C with the IRS, (b) individual Form
1040s filed by employees, and (c) information provided by
individuals who enrolled in the exchange.
Your Initial Reaction. Employers should react
quickly, as the Letter 226-J only provides 30 days to defend
against a penalty assessment. The first step is to review the IRS
notice carefully, focusing on whether the facts recited in the
letter are accurate. For example, the letter assumes that your
entity is an "Applicable Large
