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ACA Updates and More Information on Penalty Notices

ACA Updates and More Information on Penalty Notices
Posted on Tuesday, January 7, 2020 by Bruce Gillis

The future of The Affordable Care Act is less certain now.


On December 18, 2019, a federal appeals court struck down part of the Affordable Care Act confirming a previous district court’s ruling that the individual mandate portion of the ACA is unconstitutional.

In issuing this ruling, the appeals court subsequently sent the case back down to the district court to evaluate if the ACA can be separated from the individual mandate (meaning that only the individual mandate would be eliminated). Or, must the entire law be struck down as unconstitutional. 

What does this mean for employers? And what specifically does it mean for those working on their Tax Year 2019 ACA reporting? Or those dealing with penalty notices received for prior tax years?

While the courts continue to explore the questions surrounding the recent rulings—employers should keep several things in mind.

  • At this moment, the Affordable Care Act reporting requirements are still in place. Employers should keep their focus on the Tax Year 2019 reporting. 1095-C’s are due to be distributed on or before March 2, 2020. Please be aware that no court decisions will be issued to change this.  Moreover, with this case likely heading all the way to the Supreme Court—reporting for Tax Year 2020, in early 2021, is unlikely to be impacted.
  • Penalty notices that employers have received for prior years should continue to receive immediate attention. Much as the reporting requirements are not likely to change in the immediate term, the penalties are in line with the existing laws and should be addressed timely and thoroughly.

Speaking of penalty notices… we wanted to revisit the steps employers should take if they receive these penalty notices.

  • First of all, don’t panic! These notices generally allow 30 calendar days for a response. Taking quick and deliberate steps to research and resolve the issues is far more productive than panicking.
  • Now, review the reason for the notice:
    1. Are your forms complete? Some issues that have been identified in IRS communications come from improperly completed forms (often occurring in the early years of ACA reporting when IRS guidance was not as robust as it is now). Work with your ACA administrator to correct the forms and, if necessary, resubmit the data.
    2. Check the formatting. Some employers have received notices indicating their forms were submitted in portrait mode, instead of in landscape. If the employer had filed electronically, the resolution may be as simple as calling the number on the penalty notice and providing the business name and EIN to confirm data was submitted electronically.
    3. Review the employee status. There have been some instances where employers receive notices due to individual participant’s offer of coverage or full-time status being incorrect. These may require individual by individual reviews. Having as much time as possible to research these instances is ideal as it may take some time. Coordinating quickly with your ACA administrator (if supported externally) is critical— especially this time of year when administrators focus their efforts on producing the 2019 1095s.

The Affordable Care Act is getting a lot of attention in the news lately. But, despite the most recent court ruling, it is still the law of the land. Employers need to continue to stay diligent in their adherence to its requirements. The reporting requirements and penalty obligations will continue to remain a priority throughout 2020, as the Supreme Court will likely have the last word in the fate of the Affordable Care Act. 

Want to get a better idea of what’s to come in 2020 compliance? Listen to our webinar where experts weigh in on the big ticket items. Check it out below. 



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Bruce Gillis Head of Compliance Lorem ipsum dolor sit amet. View All Posts