The Internal Revenue Service has updated its “Questions and Answers on the Employer Shared Responsibility Provisions under the Affordable Care Act” to describe procedures it will use to propose and assess the Affordable Care Act’s employer shared responsibility payment.

According to Q&A Number 55, which asks how an employer will know that it owes a shared responsibility payment, the agency describes the procedures it will follow to propose and assess such payments against applicable large employers (ALE). Specifically, the IRS will issue Letter 226J to an ALE that is determined to have had one or more full-time employees enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee) for at least one month in the year.

The following information will be included in the letter:

• An employer shared responsibility summary table that itemizes the proposed payment, as well as an explanation of the table;

• An employer shared responsibility response form (Form 14764: “ESRP Response”);

• An employee PTC list (Form 14765: “Employee Premium Tax Credit (PTC) List”) that lists the ALE’s assessable full-time employees (individuals who for at least one month in the year were full-time employees allowed a premium tax credit and for whom the ALE did not qualify for an affordability safe harbor or other relief;

• A description of the actions the ALE should take if it agrees or disagrees with the IRS’s proposed employer shared responsibility payment;

• A description of the actions the agency will take if the ALE does not timely respond by the response date listed on Letter 226J, which generally will be 30 days after the date of the letter; and

• The name and contact information of a specific IRS employee that the ALE should contact with questions.

The Q&A further explains that the IRS plans to issue Letter 226J to inform ALEs of their potential liability for employer shared responsibility payments for the 2015 calendar year sometime in late 2017.