The White House Office of Management and Budget (OMB) released on February 2, 2015 the Fiscal Year 2016 Budget. It includes a specific provision where the IRS will ramp up enforcement efforts to “address noncompliance” including the employer responsibility provisions of the Affordable Care Act (ACA). The Budget proposes hiring over 400 full-time employees to enforce ACA statutory requirements. Audits are expected to be the primary enforcement effort, although a portion of those employees may be handling the assessment and appeal process associated with the annual reporting requirements.
From Page 68 of the Department of the Treasury – Budget in Brief:
Address Impact of ACA Statutory Requirements +$67,206,000 / +483 FTE
“As the tax law changes, the IRS must implement programs to ensure that taxpayers understand the new laws, and that the IRS can address noncompliance. The new ACA tax provisions strengthen oversight of tax exempt hospital organizations and include new fees on manufacturers and importers of branded prescription drugs and health insurers. This initiative also expands the compliance coverage of tax-exempt hospital organizations by refining the community benefit reviews and by leveraging this data to conduct examinations; expands coverage of new provisions related to the premium tax credit, individual responsibility requirement, and large employer insurance; and addresses new audit requirements related to the shared employer responsibility payment. This initiative includes a $60.8 million initial investment in traditional revenue-producing activities that are expected to annually produce additional enforcement revenue of $181.7 million, once the new hires reach full potential in FY 2018, an ROI of $2.8 to $1, and an initial investment of $6.4 million in revenue-protecting activities that are expected to protect $88.7 million of revenue, a protected ROI of $12.2 to $1.”
The Congressional Budget Office (CBO) estimates that employer shared responsibility penalties will produce $8 billion in 2016 (relating to 2015 penalties). From 2016-2024, the CBO estimates that penalty payments will total $139 billion.
ACA Compliance and the shared responsibility payments for employers are here for employers who meet or exceed the employee count size thresholds. Navigating compliance with the ACA is a challenge for business owners and managers and Professional Employer Organizations are uniquely positioned help businesses ensure successful ACA compliance and the avoidance of audits and non-compliance penalties. StaffMarket is the national marketplace for the Professional Employer Organization industry and will help you find the right PEO for your company.
