The Internal Revenue Service (IRS) has announced that it expects the letters informing applicable large employers (ALEs) that filed Forms 1094-C and 1095-C of their potential liability for a “pay or play” payment for the 2015 calendar year (with reporting in 2016) to be issued in 2017. Going forward, the agency intends to issue letters informing ALEs that filed Forms 1094-C and 1095-C of their potential liability, if any, in the latter part of each calendar year in which reporting was due (for example, in late 2018 for reporting in 2018 for coverage in 2017).

While the Health Insurance Marketplaces have begun sending letters to notify certain employers that one or more of their employees has been determined eligible for advance premium tax credits and cost-sharing reductions and has enrolled in a Marketplace plan, these letters do not indicate whether an employer is required to make a pay or play payment, as only the IRS can make such determinations.

For the latest guidance on pay or play payments, please see IRS Q&As #55-58.

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