IRS Will Pursue Shared Responsibility Payment Bills Starting in 2015, Official Says

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By Lydia Beyoud

Employers who may have a shared responsibility payment under tax code Section 4980H for not offering health care to full-time employees under the Affordable Care Act can expect to hear from the Internal Revenue Service about payments due beginning in 2015, but only if IRS has strong evidence to support its assessment, an IRS official said March 12.

Employers will be able to dispute or explain why the shared responsibility payment assessment may be incorrect, similar to standard IRS notice and demand procedures for assessable payments, Frederick Schindler, director of implementation oversight at the IRS Affordable Care Act Office, told members of the payroll industry at the American Payroll Association 2013 Capital Summit in Washington, D.C.

However, IRS will make its assessment based on a variety of information provided by employers' insurers, from the Department of Health and Human Services, and other third-party reporting to which IRS will have access, Schindler said.

“All of that information will be utilized before we go to the employer,” Schindler added.

Beginning Jan. 1, 2014, the shared responsibility payment for large employers, generally those with 50 full-time or full-time equivalent employees, is triggered if at least one employee receives a premium tax credit to help them pay for health coverage, if an employer does not provide a plan that meets minimum coverage requirements. Employees will use the tax credit to help purchase individual coverage on an affordable insurance exchange.
Copyright 2013, The Bureau of National Affairs, Inc.