You got a letter.
Here's what to do next.
ACA penalty relief for Letters 226-J, 5699, and 972CG. You now have 90 days to respond.
ACA penalties can reach six figures. They can also be reduced or eliminated entirely if you respond correctly and on time. ACA 360 has done this before. Let us do it for you.
The letters we handle. Every week.
Different notice, different penalty math. Same playbook: respond correctly, on time, with documentation that holds up.
Letter 226-J
The IRS is assessing penalties for failing to offer affordable, minimum-value coverage to your full-time employees. This is the one that can reach hundreds of thousands of dollars.
Letter 5699
The IRS is asking whether you qualify as an Applicable Large Employer. Don't respond, and they'll assume you do — and proceed straight to penalties.
Letter 972CG
Late or incorrect 1095/1094-C filings. Per-employee penalties stack quickly. We document Reasonable Cause and pursue First-Time Abatement.
What's at stake.
Penalty amounts are indexed to inflation annually. For 2025, they're higher than they've ever been — and the IRS now has a 90-day clock on your response.
| Penalty | 2025 Rate |
|---|---|
| 4980H(a) — no offer of coverage | $2,970 / FTE |
| 4980H(b) — unaffordable or inadequate | $4,350 / subsidy |
| Late or incorrect 1095/1094-C | $560 / employee |
Why these letters get sent.
Most of these errors are fixable. Most penalties are negotiable. But only if you act — and only if your response cites the right authorities and produces the right documents.
- → Safe harbor codes missing or wrong on Form 1095-C
- → Forms filed late or not distributed to employees
- → Variable-hour or rehired employees misclassified
- → Coverage didn't meet affordability or minimum value
- → Payroll or HR software produced inaccurate data
Our relief process.
Six steps from your first call to a closed file — and the systems that prevent the next letter.
We review your letter
We analyze the notice, identify the penalty basis, and tell you exactly where you stand.
We gather documentation
Offers of coverage, payroll records, measurement method documentation, and compliance history.
We build your case
We prepare your response using IRS-recognized relief criteria: Reasonable Cause or First-Time Abatement.
We submit to the IRS
A complete, professional response submitted well within the 90-day window.
We see it through
We track your case and handle any appeals until it's resolved.
We prevent the next one
After your case closes, we audit your compliance and set up monthly tracking that should've been there from day one.
Where we see penalty letters most often.
Some industries get hit harder. The complexity of the workforce drives the exposure.
Per diem, multi-EIN, turnover that never sleeps.
We apply look-back measurement to variable-hour clinical staff, centralize eligibility tracking across all locations, and flag coverage obligations in real time.
The IRS doesn't adjust for your turnover rate. Your tracking system needs to.
Shift work, union overlays, payroll blind spots.
We tailor measurement periods by shift, department, or job class — and consolidate data across HR, payroll, and scheduling platforms.
Unions don't override the ACA. Your non-union workforce still determines your exposure.
Tips, seasons, franchises — all on the line.
We aggregate eligibility across all locations and ownership groups, apply safe-harbor strategies for tipped staff, and navigate seasonal employee rules.
Multiple FEINs may be treated as a single ALE group. Most franchise operators aren't tracking this correctly.
Constant rehires, schedule churn, silent risk.
We detect eligibility trends, apply proper break-in-service rules so rehires don't become retroactive liabilities, and integrate with your timekeeping system for live monitoring.
If you can't show the IRS a proper break-in-service calculation, you're exposed.
When we first received IRS correspondence related to our ACA reporting obligations, we weren't sure where to turn. ACA compliance can be overwhelming, but ACA 360 made a complicated process understandable and manageable.
Why employers work with us.
We know 226-J, 5699, and 972CG notices in detail. We know what the IRS is looking for and how to respond in a way that gives you the best shot at reducing or eliminating the penalty.
A real person, not a portal. Flat-fee pricing, no hourly billing surprises. And we don't stop at the response — after your case closes, we build the systems that protect you going forward.
What employers always ask.
What happens if I ignore the letter?
I have a payroll provider. Shouldn't they have caught this?
How much can a 226-J actually cost?
What does pricing look like?
You have 90 days.
Don't waste them.
A 15-minute conversation tells you exactly where you stand and what the next 90 days should look like. No pressure. No jargon. Just honest guidance from people who do this every day.