ACA Penalties Support



SPS/GZ offers comprehensive ACA support for responses and resolutions of ACA penalties to employers and entities of all sizes, whether or not they used SPS/GZ for the initial reporting of Forms 1095-C, 1095-B, 1094-C, and 1094-B. The Employer Shared Responsibility Payment (ESRP) Penalty relates to fines for Applicable Large Employers (ALEs) that are not providing health insurance coverage in accordance with the ALE mandate within the Affordable Care Act (known as the “ACA Employer Mandate”).  The ESRP Penalty is triggered if coverage is not offered to at least 95% of an ALE’s full-time employees or if the coverage that is offered to employees is not considered “affordable” according to the ACA.  

SPS/GZ reviews the penalty and all supporting documentation with the client and drafts a response based on a wealth of experience with the various ACA penalties issued by the IRS.  SPS/GZ has a deep understanding of the IRS system and the ACA codes and regulations.  SPS/GZ has a very high success rate in getting penalties dismissed or reduced.


What is the background of the  Affordable Care Act Penalty?

The Federal ACA Employer Mandate requires employers with 50 or more full-time employees, including full-time equivalents, to offer affordable health insurance that provides a minimum level of coverage to their full-time employees and their dependents, or they may face ACA penalties. The penalty for the federal Individual Mandate, which required individuals to have health coverage or pay an ACA tax penalty, was reduced to $0 effective for tax years beginning in 2019. However, some states (Massachusetts, New Jersey, Vermont, Rhode Island, and California and also DC) still impose penalties if a person does not have health insurance.

What are the ACA penalties?

There are several types of penalties the IRS can impose if an ALE does not follow the ACA Employer Mandate regulations.

How can I avoid the ACA tax penalty?

There are several types of penalties the IRS can impose if an ALE does not follow the ACA Employer Mandate regulations.

Is the IRS really enforcing the Affordable Care Act Penalty?

The short answer is YES!  In fact, the IRS has ramped up staffing and auditing efforts in order to be able to issue and collect more ACA penalties.  The trend has been even more rampant since the IRS removed the Good Faith Transition Relief for tax years beginning in 2021, which means that penalties will be assessed for incorrect coding on the complex Forms 1095-C, 1094-C, 1095-B, and 1094-B.  

What do I do if I receive an Affordable Care Act Tax Penalty notice in the mail?

Take a deep breath. Scan a copy of the ACA tax penalty notice. Pay close attention to the deadline for responding. Begin researching the details of the employees who were included on the IRS ESRP penalty notice. Find copies of the 1095-C forms that were filed for these individuals, as well as the Form 1094-C that was filed for that respective tax year.  Examine if you have an argument for disputing all or part of the penalty. Draft a response letter to the IRS and mail it via Certified Mail, enclosing all supporting documentation.  Include a check if you agree with all or part of the ACA tax penalty being assessed.

How can SPS/GZ help?

SPS/GZ has Certified Healthcare Reform Specialists and Certified Public Accountants on staff who have a strong command of the reporting requirements and nuances of the Affordable Care Act. The SPS/GZ certified professionals will review your ESRP penalty and determine if the ACA Employer Mandate has been met for that tax year.  SPS/GZ will then review all details of the forms filed for the employee population in question and will swiftly find the best plan for response and hopeful reduction or resolution of the ESRP penalty, if possible.

Has SPS/GZ been successful in resolving employers’ Affordable Care Act penalties in the past?

Yes! SPS/GZ has a very high rate of success in the partial or complete elimination of ACA penalties.  SPS/GZ educates its clients about the ACA Employer Mandate, gathers all documentation, reviews the forms and data in question, and drafts a detailed response that is as favorable to the client as possible while still falling within the regulations of the  ACA.  SPS/GZ also has a 100% success rate in avoiding penalties for clients who follow the ACA Employer Mandate correctly by ensuring that all data is reviewed, coding is accurate, and all penalty triggers are resolved before filing the ACA tax forms with the IRS.

Contact SPS/GZ today to learn more about our expert and comprehensive ACA Solution!

Toll Free: (888) 375-3049

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