Trump's IRS sends hundreds of ACA fine notices to employers: 5 things to know

The Internal Revenue Service is issuing prospective fines to hundreds of companies for violating the ACA's employer mandate, according to a Politico report.

Here are five things to know.

1. The employer mandate requires applicable large employers to offer "affordable" and "minimum value" essential coverage to their full-time employees as well as their dependents, or potentially owe a fine, according to the IRS. The mandate applies to employers with at least 50 full-time employees, on average, including full-time-equivalent employees, during the prior calendar year.

2. When ALEs have one or more employees covered through the ACA marketplace who receive a tax credit, the companies will likely be fined, according to the report.

3. The recently mailed prospective fines, which the companies can dispute with the IRS, can range into the millions and are for the year 2015, according to the report. Under the Obama administration, the IRS did not attempt to collect the fines.

4. The issue could spur a potential lawsuit. Alden Bianchi, an attorney who represents some businesses facing potential fines, told Politico: "Litigation is in the works. There is a challenge out there, and it's brewing, and the players are serious."

5. Various sources told Politico a potential lawsuit would likely focus on employer mandate enforcement. The criteria for affected employers changed from companies with more than 100 full-time employees to companies with more than 50 full-time employees beginning in 2016. Additionally, according to the report, companies argue they weren't notified by the federal exchange and some state-run exchanges regarding the possibility of a fine, according to the report.

Read the full Politico report here.

 

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