The Affordable Care Act (ACA) is the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010. The ACA requires certain employers report to the IRS annually regarding the health care coverage they offer to full-time employees.
While the Individual Mandate was effectively repealed as of January 1, 2019, employer obligations remain unchanged. The ACA Employer Mandate is in force for the 2019 calendar year and employers must continue to provide proof of their offer of coverage to the IRS with forms 1095-C and 1094-C.
Under Section 6056 of the Internal Revenue Code, an Applicable Large Employer (ALE) must report information on Form 1095-C that discloses if an employer is subject to assessment of a Shared Responsibility Payment. The report also determines if full-time employees are eligible for a premium tax credit, which helps pay for health insurance if the employee purchases it on the Health Insurance Marketplace. Generally, an ALE is an employer with 50 or more full-time equivalent (FTE) employees. If you are unsure whether your organization is an ALE, contact us to discuss.
REPORTING DEADLINES –
- January 31, 2020 – Form 1095-C must be furnished by ALEs to all full-time employees
- February 28, 2020 – Filing of Form 1095-C due for 2019, if filed on paper
- March 31, 2020 – Filing of Form 1095-C due for 2019, if filed electronically
POTENTIAL PENALTIES –
Employers that do not file an annual IRS return or provide individual statements to all full-time employees may be subject to a penalty up to $270 per return. That penalty is doubled for failing to file due to intentional disregard.
The IRS has begun notifying employers of ESRPs (Employer-Shared Responsibility Payments), otherwise known as ACA penalties. In 2017, they started sending the first letters, to address penalties associated with the 2015 filing year for forms provided to the IRS in 2016. If you receive a notice from the IRS regarding your reporting, it is important to provide a timely response to this letter. If you aren’t sure how to respond, we can assist.
If you need assistance with your 2019 ACA Reporting or responding to an Employer-Shared Responsibility Payment notice, please contact us.