2017 Aca Reporting
For further information about the employer shared responsibility provisions under section 4980H and the reporting requirements under section 6056, see the section 4980H regulations and our section 4980H questions and answers, the section 6056 questions and answers and the Forms 1094-C and 1095-C questions and answers. As you know, the Affordable Care Act requires health insurers, self-insured employers, government agencies, and other providers of minimum essential coverage to furnish annual informational statements to individuals whom they cover, as well as annual informational returns to the IRS. If you are fully insured, you receive these forms from your insurance company. The ACA imposes large penalties on applicable large employers who fail to timely file Forms 1094 or 1095 with the federal government, or who fail to timely furnish Form 1095 to an employee.
For calendar year 2017, Forms 1094-C and 1095-C are required to be filed by February 28, 2018, or April 2, 2018, if filing electronically. Notice also extends to the 2017 reporting the transition relief from penalties that was provided for past reporting.
What is the employer penalty for ACA?
It should come as no surprise that the penalty amounts have increased and thus ACA Compliance should continue to be a priority for employers. For the 2021 tax year, the annual ACA Employer Mandate penalties under 4980H(a) and 4980H(b) will be $2,700 and $4,060, respectively.
The IRS does not anticipate extending the filing or furnishing deadlines for 2017 reporting. We wanted to pass along welcome news from the IRS regarding ACA reporting requirements under Code Sections 6055 and 6056 for the 2017 calendar year . This deadline remains February 28, 2018, if not filing electronically, or April 2, 2018, if filing electronically. For the 2015 and 2016 filing cycles, the IRS provided ALEs with transitional relief from penalties related to incomplete or incorrect forms, if the ALE could show that it made a good faith effort to comply with the reporting requirements. In particular, this relief applied to missing and inaccurate information on the forms. However, no relief was provided for failure to file or to furnish a statement by the due dates. Notice confirms that this same relief also applies for the 2017 filing cycle.
However, consistent with the existing information reporting rules, reporting entities that fail to timely meet the requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under section 6724 are satisfied. These extended dates have no effect on the penalty relief described below for incomplete or incorrect returns filed or statements furnished to covered individuals in 2016 for coverage provided in calendar year 2015. In Notice PDF, IRS extended the 2016 due dates for the 2015 information reporting requirements, for both filing information returns with the IRS and furnishing statements to individuals, for insurers, self-insured employers, and other coverage providers under section 6055, and for ALE Members under section 6056.
There is however relief for de minimis errors on Line 15 of the 1095-C. Under the Patient Protection and Affordable Care Act , individuals are required to have health insurance while applicable large employers are required to offer health benefits to their full-time employees. Unlike other information returns and forms like W-2s, the 1094 and 1095 forms can require information from multiple systems of record for one annual filing. This means employers need to gather tracked information from HR, payroll, benefits, etc. Waiting until the beginning of 2017 to act on ACA tracking and reporting could leave your company facing steep financial penalties. Under Code sections 6055 and 6056, ALEs must use Form 1094-C to report required information about whether or not the employer offered affordable minimum essential health coverage and enrollment in minimum essential health coverage for eligible employees.
When Must An Ale Member File The Required Information Return With The Irs?
IRS has recognized – as they did in the past two years – that many employers, insurers, and other providers of health coverage need additional time to comply with the ACA reporting requirements. Therefore, on December 22, 2017, they issued Notice , which automatically extended the due date for furnishing Forms 1095-C and 1095-B to individuals by 30 days – from January 31, 2018, to March 2, 2018. With this automatic extension, the IRS will not grant any additional extensions beyond March 2, 2018. The IRS developed two sets of information returns that employers and coverage providers use to satisfy their ACA reporting obligations – the 1095-B and 1095-C. Under regulations, employers and coverage providers must furnish Forms 1095-B and 1095-C to individuals for the 2017 calendar year by January 31, 2018. They must also submit these forms to the IRS by April 2, 2018, if filing electronically.
ALE Members that sponsor self-insured group health plans also are required to report information about employees and their spouse, dependents, and other family members who enroll in the self-insured coverage; these information reporting requirements for providers of minimum essential coverage apply under section 6055. ALE Members that sponsor self-insured group health plans generally provide the information required under both sections 6055 and 6056 on Form 1094-C and Form 1095-C. The IRS and individuals will use the information provided under section 6055 to verify compliance with the individual shared responsibility provisions under section 5000A. Certain employers are required to report to the IRS information about whether they offered health coverage to their employees and if so, information about the coverage offered. That means compliance and reporting for the ACA requires applicable large employers to offer appropriate and affordable health coverage to their full-time employees who work an average of 30 or more hours per week . Employers must face reality and continue to be compliant or face the consequences.
Even though an extension has been granted, employers and other coverage providers are encouraged to issue their 2017 statements to employees as soon as they are able. There has been no change to the deadline for filing 2017 returns with the IRS, and taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their tax returns. The ACA also requires applicable large employers (those with 50 or more full-time equivalent employees) and small employers who are self-insured to file a return and furnish statements to their full-time employees as to the coverage, if any, that they offer to full-time employees. Form 1095-C, Line 15 is where employers report on the monthly cost of the lowest employee-only premium offered to employees. So long as the dollar amount reported on Line 15 is not incorrect or off by more than $100, no penalty will be imposed for filing incorrect information. However, payees can elect out of the safe harbor and request a corrected form. If an employee does that, penalties for the error would apply to the employer.
See Questions and Answers on Information Reporting by Health Coverage Providers . Generally, a health coverage provider must file Form 1094-B and Form 1095-B . For further information about the employer shared responsibility provisions and who is an ALE member, see the section 4980H final regulations and our section 4980H questions and answers. For further information about the forms, see the instructions for Forms 1094-B and 1095-BPDF, the instructions for Forms 1094-C and 1095-CPDFand the questions and answers about Forms 1094-C and 1095-C.
Employers, regardless of size, that sponsor a self-funded (self-insured) health plan providing minimum essential coverage are required to report coverage information about enrollees. To meet this reporting requirement, the employer furnishes Form 1095-B to the primary enrollee and files copies, along with transmittal Form 1094-B, with the IRS. Self-funded employers who also are ALEs may use Forms 1095-C and 1094-C in lieu of Forms 1095-B and 1094-B. The Affordable Care Act added Sections 6055 and 6056 to the Internal Revenue Code, thereby requiring sponsors of health care plans to maintain minimum essential coverage of their employees throughout the year or face potential fees.
How Does An Ale Member Report Under The 98% Offer Method?
In that case, the Form 1094-C filed by County X covering the remaining 150 full-time employees would not indicate that it is an Authoritative Transmittal. An ALE Member is required to report information about the coverage, if any, offered to each of its full-time employees, including whether or not an offer of coverage was made. This requirement applies to all ALE Members with full-time employees, regardless of whether they offered coverage to all, none, or some of their full-time employees. For each of its full-time employees, the ALE Member is required to file Form 1095-C with the IRS and furnish a copy of Form 1095-C to the employee, regardless of whether coverage was or was not offered to the employee. Therefore, even if an ALE Member does not offer coverage to any of its full-time employees, it must file returns with the IRS and furnish statements to each of its full-time employees to report that coverage was not offered. See Identification of Full-Time Employees for more information on identifying full-time employees, and see the Instructions for Forms 1094-C and 1095-C and the Questions and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C for more information on how to report. The employer will generally satisfy its reporting obligations under section 6055 by filing Form 1094-B and Form 1095-B for employees who enrolled in coverage.
- Form 1094-C is the transmittal report which accompanies and summarizes information from Forms 1095-C. A Form 1095-C is filed for each employee, who was full-time for one or more months during the calendar year and includes details of any health care coverage offered to the employee, reported on a monthly basis.
- Because Notice provides transition relief for section 6055 reporting for 2014, the first section 6055 returns required to be filed are for the 2015 calendar year and must be filed no later than February 29, 2016, or March 31, 2016, if filed electronically.
- The annual ACA reporting is required regardless of whether or not an ALE offered health insurance coverage.
- However, see Extended Due Dates and Transition Reliefregarding an extension of these dates for 2015 reporting due in 2016.
- A health coverage provider generally must file the information return and transmittal form with the IRS on or before February 28 of the year following the calendar year in which it provided minimum essential coverage to an individual.
- For self-insured plans, Form 1095-C must also be provided to any individuals who enrolled in qualified coverage, which may include non-full-time employees and any covered spouses and dependents.
This did not apply to employers that fail to timely file or furnish a statement. For 2017, the IRS has unofficially indicated that the “good faith compliance efforts” relating to reporting requirements will not be extended. Employers should be ready to fully meet the reporting requirements in early 2018 with a high degree of accuracy.
Must An Ale Member Furnish The Employee Statements To Full
Section 6056 requires employers that are ALEs under the employer shared responsibility provisions to file information returns with the IRS about whether they offered health coverage to their full-time employees and, if so, information about the offer of coverage. For definitions of ALE and full-time employee, see Employers Subject to the Employer Shared Responsibility Provisions and Identification of Full-Time Employees sections in the Employer Shared Responsibility FAQs. For example, a group health plan insurer that makes a reasonable effort to obtain the EIN of the employer sponsoring the coverage will not be subject to penalties under sections 6721 or 6722 if the insurer fails to enter an EIN on line 11 of Form 1095-B for 2015 or enters an EIN that is found to be incorrect. No relief is provided in the case of reporting entities that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement.
These extensions applied automatically to all employers and other coverage providers and were longer than the 30-day extensions that could otherwise be obtained. Therefore, the IRS did not process any previously requested extensions of these deadlines for 2015 reporting in 2016. Employers or other coverage providers that did not comply with the extended due dates in Notice may be subject to penalties under section 6722 or 6721 for failure to timely furnish and file. However, unless prohibited by other law, a government employer that maintains a self-insured group health plan may designate a related governmental unit, or an agency or instrumentality of a governmental unit, as the person to file the returns and furnish the statements for some or all individuals covered under that plan. The Employer Shared Responsibility rule of the ACA still requires employers to file annual information returns with the IRS and send summary statements to verify the “minimum essential coverage” as mandated by ACA is being met.
Is An Ale Member Required To Report Under Section 6056 For A Full
In particular, penalty relief may apply if the IRS determines that the standards for reasonable cause under section 6724 have been met. No relief is provided in the case of ALE Members that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement. ALE Members may enter into arrangements with issuers, other ALE members or third parties to have the other party file the return with the IRS, furnish the statements to its employees, or both. However, entering into a reporting arrangement does not transfer the ALE Member’s potential liability under section 4980H and does not transfer the potential liability for failure of the ALE Member to file timely, complete and accurate returns and furnish timely, complete and accurate statements under section 6056. If a person who prepares returns or statements required under section 6056 is a tax return preparer, that person will be subject to the requirements generally applicable to tax return preparers.
How many hours does an employee have to work to be eligible for health insurance?
The Affordable Care Act (ACA) requires employers to offer health insurance to employees working at least 30 hours per week (or 130 hours per month) to avoid paying penalties. See Identifying Full-time Employees.
An employer that sponsors an insured health plan will not report as a provider of health coverage under section 6055. The health insurance issuer or carrier is responsible for reporting that health coverage. However, if the employer is subject to the employer shared responsibility provisions in section 4980H, it is responsible for reporting information under section 6056 about the coverage it offers to its full-time employees.
The safe harbor applies to reporting only, not the actual offer of coverage and affordability. These forms must have been filed with the IRS no later than Feb. 28, 2017 . However, the IRS extended the due date for furnishing individual statements for 2016 an extra 30 days, from Jan. 31, 2017, to March 2, 2017.
Is An Ale Member Required To Report Under Section 6056 If The Ale Member Has No Full
Further, every provider of MEC must report coverage information by filing an information return with the IRS and furnishing a statement to individual employees. Applicable large employers with 50 or more full-time employees or equivalents (when combining part-time hours) must distribute to enrolled employees and file with the IRS Form 1095-C, showing compliance with employer shared responsibility/minimum essential coverage requirements.
The information reporting requirements were first effective for coverage provided in 2015. Health coverage providers are required to file information returns with the IRS and furnish statements to individuals each year to report coverage information for the previous calendar year. For information on transition relief, see Extended Due Dates and Transition Relief. Because of these extensions, individuals may not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2018 individual income tax return. While information on these forms may help with preparing a return, the forms are not required, and individuals can use other information about their health coverage to prepare their returns. The IRS extended the health coverage information reporting deadlines, giving employers and providers additional time to supply tax forms to individuals.
Reporting entities that can show they made a good faith effort to comply with the reporting requirements – both for furnishing statements to individuals and filing statements and returns with the IRS – will not be subject to penalties. The relief applies to missing and inaccurate taxpayer identification numbers, dates of birth and other required information. However, no relief is provided for reporting entities that do not make a good faith effort to comply or that fail to meet the furnishing and filing deadlines. These extended dates have no effect on the penalty relief described below, for incomplete or incorrect returns filed or statements furnished to employees in 2016 for coverage offered in calendar year 2015. In addition, consistent with existing information reporting rules, filers that are assessed penalties may still meet the criteria for a reasonable cause waiver from the penalties. This is the case for any individual who was an employee for any month of the year, whether or not the employer has any full-time employees and whether or not the employee is a full-time employee. The Affordable Care Act added sections 4980H and 6056 to the Internal Revenue Code.
The annual ACA reporting is required regardless of whether or not an ALE offered health insurance coverage. A health coverage provider generally must file the information return and transmittal form with the IRS on or before February 28 of the year following the calendar year in which it provided minimum essential coverage to an individual. Because Notice provides transition relief for section 6055 reporting for 2014, the first section 6055 returns required to be filed are for the 2015 calendar year and must be filed no later than February 29, 2016, or March 31, 2016, if filed electronically. However, see Extended Due Dates and Transition Reliefregarding an extension of these dates for 2015 reporting due in 2016. Form 1094-C is the transmittal report which accompanies and summarizes information from Forms 1095-C. A Form 1095-C is filed for each employee, who was full-time for one or more months during the calendar year and includes details of any health care coverage offered to the employee, reported on a monthly basis. For self-insured plans, Form 1095-C must also be provided to any individuals who enrolled in qualified coverage, which may include non-full-time employees and any covered spouses and dependents.
For calendar year 2017, Forms 1094-C, 1095-C, 1094-B, and 1095-B must be filed by February 28, 2018, or April 2, 2018, if filing electronically. In late 2016, a filing deadline was provided for forms due in early 2017, however it is unknown if that extension will be provided for forms due in early 2018. Until employers are told otherwise, they should plan on meeting the current deadlines. In welcome relief for many employers, the IRS has again automatically extended by 30 days – from January 31, 2018 to March 2, 2018 – the ACA reporting deadline for furnishing the Forms 1095-C and 1095-B to employees. However, the deadline for filing the forms with the IRS has not been extended, and remains April 2, 2018, for electronic submissions.
Applicable large employers , who generally are entities that employed 50 or more full-time and full-time-equivalent employees in the prior year, are required to report information about the health coverage they offer or do not offer to certain employees. To meet this reporting requirement, the ALE furnishes Form 1095-C to the employee or former employee and files copies, along with transmittal Form 1094-C, with the IRS. Some individual taxpayers may be affected by this extension because the information included on the 1095-C or 1095-B is needed to complete their 2017 tax return. For example, individuals use the information on these forms to confirm that they had minimum essential coverage during 2017. Similar to last year, the notice states that individuals who do not receive these forms before they file their tax return can rely on other information received from their employer when completing their returns. The IRS instructions for completing the 1095-C and 1095-B also confirm that these forms are not attached to the individual’s tax return.
These forms document that the employer offered and, if applicable, provided health coverage under the ACA to the employee in 2017. The penalty is currently $250 per form, subject to a maximum of $3 million, although there are circumstances in which the penalty can be reduced or, in the case of intentional conduct, increased.
Employers should be working with all involved departments, reviewing employee data, ensuring any errors are corrected, and making preparations for reporting 2017 data to the IRS on 1095s and the 1094 transmittal. For 2017 ACA reporting and compliance, employers are required to track the hours worked of part-time and variable-hour employees to determine if they should be offered coverage like all other full-time employees. On November 29, 2018, the IRS issued Notice , extending the Affordable Care Act deadline for providing individuals Form 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage. The notice also offers similar good-faith effort for 2018 as was available for 2017. This is an automatic 30-day extension from the original due date of January 31, 2019, and employers and providers don’t have to request it. Take note that the recent ruling does not impact reporting requirements for the 2018 tax year. In past years, the IRS provided relief to employers who make a good faith effort to comply with the information reporting requirements and determined that they will not be subject to penalties for failure to correctly or completely file.