Applicable Large Employers (ALES) that had a full-time employee receive a Premium Tax Credit (PTC) may begin receiving a recently-issued IRS sample letter outlining penalties. Penalties may be enforced if the employee receiving the PTC was not offered affordable and adequate health insurance. ALEs that did not offer Minimum Essential Coverage (MEC) to 95 percent or 70 percent of employees (if transition relief applies) may receive a letter as well if an employee qualified to receive a PTC.

Letters will be issued based upon how employers filed their 1095-Cs. If line 16 did not include an applicable safe harbor code and an employee received a PTC, the IRS will issue a letter to the employer. Therefore, it is extremely important for employers to never leave line 16 on the 1095-C blank, unless a blank is applicable.

Employers will have thirty days from the date of the letter to respond to the IRS. HBE can offer assistance in responding to these notices. For additional information regarding Affordable Care Act 1094/1095 reporting, please contact Dan Carmichael or Kristi Schultz at HBE LLP.