IRS Outlines Employer Mandate Enforcement Process

November 15, 2017


We expected the IRS to provide additional information about its enforcement of the Patient Protection and Affordable Care Act’s “Employer Mandate” before the end of this year, and they recently did just that. Without any fanfare, the IRS has outlined its plans by simply updating the FAQs at their website.

The new FAQs, Q/A 55–58, discuss:

  • The IRS’ plan to send Letter 226J to inform Applicable Large Employers (ALEs) when a penalty is owed;
  • The process an ALE should follow if it disagrees and wants to appeal the IRS’ determination;
  • What an ALE must do to make a penalty payment; and
  • The IRS’ plan for when it will begin notifying employers.

Regarding this last point, the IRS has said that the first round of enforcement will be for penalties incurred in 2015. The IRS will begin sending Letter 226J to identified ALEs in “late 2017.”

As a reminder, an ALE is an employer that had an average of 50 or more full-time employees and FTEs in the prior calendar year. Only ALEs are subject to the employer shared responsibility provisions of the Patient Protection and Affordable Care Act.


Please read the new Gallagher article on the Employer Shared Responsibility enforcement process for additional information about these important developments. If you have any questions about the Employer Mandate or the IRS’ enforcement plans, please contact your consultant or client manager at (919) 403-1986..