X

Even if ACA is Repealed Reporting will Still Be Required

posted on
Even if ACA is Repealed Reporting will Still Be Required

Many employers believe that “ACA Repeal” will lead to the extinction of Form 1095 and IRS reporting, however the IRS has indicated that they will continue to require reporting and they will impose penalties. From the IRS website, “Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe‎.”

The Deadlines for Tax Year 2017 are:

ACA Requirement

Deadline Date

1095 C forms delivered to employees

January 31, 2018

Paper Filing with IRS

February 28, 2018

eFiling with IRS

April 2, 2018

Under current law and under either Congressional Healthcare bill (The House or the Senate Version) the IRS requirement to report remains unchanged. This means that Form 1095 reporting for 2017 is still required. Employers that do not submit an annual IRS return or provide individual statements (Form 1095) to covered individuals may be subject to penalties of up to $500 per return, with a maximum penalty of $6 million.

The most obvious way to avoid penalties is to comply with all the IRS compliance and reporting deadlines and file accurately. Another option is to use a third party vendor for reporting who specializes in ACA reporting services and one that promises to pay the fines related to late filing.

During the startup phase of ACA Compliance Reporting, the IRS had been relatively lenient in doling out penalties for non-conforming employers. Additionally, they have regularly extended the deadline to help organizations comply with the new regulations. However, for TY2017, there’s is only one opportunity to file for a 30 day extension. You must complete Form 8099. There is no signal from the IRS that they will further extend any deadlines or waive any penalties.

For 2017 forms 1095-B & 1095-C must be postmarked no later than January 31, 2018 to meet the preliminary deadline. The window for employers is very tight. On top off all the other year end accounting, tracking and process review, the execution of preparing forms needs to start immediately. The challenge is to compile the data, submit the compliance reports, meet all the regulations on schedule and avoid any fines.

While mailing forms to all employees in one month may sound ominous but manageable, the process is more convoluted than it sounds. Here is some insight into the steps involved. Organizations need to evaluate and confirm employee eligibility plus affordability determination for their benefit plan (Monthly Measurement Method & Look-Back Method). Reporting is needed for Part Time/Variable Hour Tracking to monitor employee hours across same-owned companies, flex schedule review, shift crossover between pay periods, impact of employee replacement, seasonal workers, job description hours, and more.

Companies also need to comply by coordinating completion of the other steps in the process. They have to manage and secure data, establish cross-format data integration, apply for Transmission Control Codes (TCC), adminsiter HRIS or TPA system incorporation, coordinate information submission and respond timely to requests for error correction.

The Deadlines for Tax Year 2017 are:

ACA Requirement

Deadline Date

1095 C forms delivered to employees

January 31, 2018

Paper Filing with IRS

February 28, 2018

eFiling with IRS

April 2, 2018

The penalty for furnishing forms late or incorrectly is $260 per form, to a maximum of $3,000,000 However, if you furnish the forms within 30 days (i.e., by April 30), the fine is reduced by the IRS from $260 to $50 per form. Conversely, if the IRS deems that you willfully neglected to submit your filing, fines can be increased to $530 per form with a maximum penalty of $6 million. 

The IRS offered some relief for TY 2016. They implemented the August. 1, 2017 Rule. If 1095-Cs/Bs were furnished after April 30, 2016, but before Aug. 1, 2016: the per-return penalty was reduced from $260 to $100 per return, and the calendar-year cap is reduced to $1.5 million. For paper and eFilings with the IRS (as opposed to mailing 1095s to employees), the late filing dates for reduced penalties are different.

 If an employer is filing electronically, the 1094/1095 forms must be submitted to the Internal Revenue Service by Monday, April 2, 2018. Applicable Large Employers (ALEs) and their brokers should be aware of the deadlines for furnishing correct 1095-Cs to their full time employees and the penalty consequences attributable to furnishing an untimely or incorrect 1095-C

Under the Employer Shared Responsibility provision of the Affordable Care Act (ACA), employers that had 50 or more full time equivalent employees in the prior calendar year are ALEs and are required to provide a report for the subsequent calendar year, on Form 1095-C, to each of their full time employees indicating whether health coverage was offered to that employee and their dependents and whether that coverage was affordable for that employee.

Information about compliance and ACA filing can be found on the IRS website: Section 6055, Section 6056, Section 6721, Section 6722. Section 4980H, Publication 1220, Transmitter Control Code (TCC) Filing, Publication 1187, Publication 1239, Publication 4810, Form 4419, Q&A on Form 1094C and Form 1085-C, Instructions for 1094 and Instructions for 1095.

To note a  key aspect of the ACA requirements under section 6055 of the IRS tax code is the affirmation that companies may hire third party vendors to fulfill the provider’s reporting responsibilities. ACA Compliance and Reporting is all BenefitScape does. Not only do we offer a 100% money back guarantee in compliance reporting, we will pay the penalty for any late filings. To learn more about BenefitScape call 508-655-3307 or email kim.phillips@benefitscape.com

| Categories: | Tags: Form 1095 , ACA Reporting , 1095 Reporting , ACA Compliance | View Count: (2526) | Return

Top 5 Newest Posts