The IRS recently started sending letters to employers asking for information about whether they met their ACA reporting obligations for 2015 and 2016 (the forms filed in 2016 and 2017). The letters are titled “Request for Employer Reporting of Offers of Health Insurance Coverage” or “Letter 5699.”
More specifically, the IRS wants to know whether employers provided 1095-C forms to their full-time employees and both the 1095-C and 1094-C forms to the IRS. As a reminder, employers were only required to provide these forms in 2016 and 2017 if they:
- Had 50 or more full-time employees (and were either fully insured or self-insured); or
- Had fewer than 50 full-time employees and were self-insured.
Employers will have 30 days after receiving the letter to respond with information regarding whether they complied with reporting requirements that applied to them in 2016 and 2017 and, if they didn’t, why not. Some possible responses include:
- You provided the necessary forms to employees and the IRS in 2016 and/or 2017;
- The ACA reporting requirements didn’t apply to you in 2016 and/or 2017 because you had fewer than 50 full-time employees and weren’t self-insured;
- You did not comply with the reporting requirements due to reasonable cause (if applicable), and either:
- Are enclosing the required forms with your response;
- Will satisfy its reporting duties within ninety days (or later, if further explained in the form); or
- Other (requiring a statement explaining why required returns were not filed, and any actions the employer plans to take to correct the problem).
In the unlikely circumstance that you failed to meet your reporting obligations, you may be subject to substantial penalties. Those that filed may receive a letter, however, employers that completed and submitted the forms on time in 2016 and 2017 should not be penalized, even if they made mistakes on the forms.
We at The Miller Group will continue to keep an ear to the ground on the IRS’s issuance of these letters and update you on any further developments. In the meantime, feel free to contact me or a member of your account team with any questions you may have.
by Julie Athey, Director of Compliance