The Affordable Care Act (ACA) is still in place and carries with it compliance requirements and the potential for steep financial penalties.
ACA Forms 1095-C and related forms were due to the IRS by April 2, 2018, if filed electronically. Penalties for late filing are severe. Failure to file information returns will result in an IRS penalty of $260/return with a maximum penalty of $3,218,500 per organization.
Worse, if the IRS determines that failure to file is the result of intentional disregard, the penalty amount will be $530/return without limitations.
|ACA Reporting Deadlines
| ACA Requirement
|Forms 1095-B or 1095-C
delivered to employees
(for 2018, the deadline was extended to March 2)
|Paper filing with IRS
|eFiling with IRS
(as this date fell on Saturday in 2018, the deadline shifted to April 2)
Employers that file 250 or more information returns with the IRS must file the returns electronically. Source: IRS.
Post-Deadline Filing Reduces Penalties
By the April 2 filing deadline, organizations could have completed Form 8809 and received an automatic 30-day extension. However, if the deadline was missed, filing late is better than not filing at all and will result in a reduced penalty amount:
- If an organization files within 30 days of the due date, the IRS will reduce the penalty for late filings from $260 to $50.
- Filing after 30 days past the due date but before Aug. 1 will result in a penalty of $100 per return with a maximum of $1,609,500.
[SHRM members-only toolkit: Complying with and Leveraging the Affordable Care Act]
Reporting Requirements Remain
Although Congress did repeal the individual mandate element of the ACA, that change doesn't go into effect until 2019. Regardless, the employer mandate remains in place, requiring applicable large employers (ALEs) with 50 or more full-time or equivalent employees (as measured during the preceding calendar year) to provide ACA-compliant coverage to most full-time employees.
Also unchanged are the ACA's reporting requirements for employers:
- ALEs must annually file Forms 1095-C with the IRS for each full-time employee, along with Form 1094-C (the transmittal form).
- Self-insured small employers (fewer than 50 full-time employees) must complete and file Forms 1095-B and 1094-B (the transmittal form) with the IRS, as well as provide full-time employees with a copy of Form 1095-B.
- Small employers must file Forms 1095-C and 1094-C if they are members of a controlled or affiliated service group.
Last December, the IRS also posted:
In another sign that the ACA is alive and well, the IRS has been issuing letter 226Js for organizations that did not comply with the ACA in tax year 2015. Letter 226J is a notice to ALEs that they might be liable for an Employer Shared Responsibility Payment.
The agency will likely continue and expand this practice to cover the 2016 filing year and beyond.
Gerry Nelligan is an attorney and regulatory analysis supervisor at Sovos, leading a team of attorneys covering Affordable Care Act reporting services. The article originally appeared on the Sovos Intelligent Compliance Blog. © 2018 Sovos Compliance LLC. All rights reserved. Reposted with permission. Hyperlinks added and content edited by SHRM Online.
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