Employer Shared Responsibility Payment Penalties

There is a significant increase in businesses receiving letters from the Ogden, Utah, office of the Internal Revenue Service (the “IRS”). Whether you are a business owner, member of the c-suite or HR professional, this notice is not a scam and should be taken seriously.

Below is a brief overview to help address this letter and the potential significant penalties.

Typically, the letter states the following:

“Dear [Employer],

We have made a preliminary calculation of the Employer Shared Responsibility Payment (ESRP) that you owe.

Proposed ESRP                    $X,XXX,XXX.XXX …”

When you look at the notice and realize that the amount of the proposed ESRP quite high, questions of “how” and “why” begin to formulate in the midst of unleveled anxiety. In our experience, we have found that the proposed ESRP penalties are a result of filing incorrect or incomplete Form 1094-C (“Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns”) and/or Form 1095-C (“Employer-Provided Health Insurance Offer and Coverage”).

ESRP Summary Table – Minimum Essential Coverage


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