ACA Reporting Requirements and Deadlines for the 2021 Tax Year
As we near the end of 2021, employers must consider their ACA reporting requirements for the tax year. The Affordable Care Act is still going strong and employers must meet their requirements to maintain their IRS compliance.
Here is an overview of the reporting requirements that employers will need to know going into 2022 and while preparing their ACA reporting for the 2021 tax year.
What businesses are required to file?
All applicable large employers (ALE) are required to file with both the IRS and supply their employees with recipient copies. An ALE is defined as having 50 or more full-time or full-time equivalent employees.
Not sure if your business is an ALE? No problem! Check out our free ALE Status Calculator. By entering your full-time employees and the hours of your part-time employees for each month of the year, our calculator will do the math to help confirm your ALE status.
What Form is required?
ALEs must file the Form 1095-C with the IRS to report their employer-sponsored health insurance plan. The following information is crucial to completing the Form 1095-C with accuracy:
- When the offer of insurance was made to the employee
- What the employees’ coverage status for each month of the year
- Proof that the health insurance plan was affordable for the employee, potentially using Safe Harbor methods to calculate the affordability.
What are ACA Codes?
There are many ACA codes that are used in the Form 1095-C, specifically for lines 14 and 16. One of these sets of codes is used to indicate the health insurance status of each employee for each month of the year. On Line 16, employers must indicate the method they used for calculating the affordability using Safe Harbor codes.
Navigating the intricacies of ACA codes can be overwhelming for many employers, that’s why it is crucial to choose an ACA reporting vendor carefully. ACAwise is able to generate these codes accurately to help employers meet their ACA requirements.
Employers offering self-funded group health insurance, insurance carriers, and non-ALEs in general must address their own reporting requirements using Form 1095-B. This form, though notably different from the 1095-C, reports similar information surrounding the covered individual. The deadlines are the same regardless of whether you are filing form 1095-B or 1095-C.
Are there any New Updates for the 2021 Tax Year?
From the tax year 2020 onwards, employers are able to offer their employees an Individual Coverage Health Reimbursement Arrangement as opposed to the traditional group health insurance plan.
This means that employees can choose their own health insurance coverage, on the Healthcare Marketplace, for example. The employer will then reimburse their employees with an allowance of tax-free money.
For the tax year 2021, there are two more new codes used to in reference to ICHRA plans on line 14:
- 1T
- Represents the Individual coverage HRA offered to the employee and spouse (no dependents) and affordability was determined using the employee’s primary residence location ZIP code.
- 1U
- Represents the Individual coverage HRA offered to the employee and spouse (no dependents) and affordability was determined using the employee’s primary employment site ZIP code affordability safe harbor.
The Recipient Copy Deadline will not be Extended
When it comes to the deadlines for ACA Reporting, employers are going to be on a much shorter timeline for tax year 2021. It is likely that there will be no extension for the recipient copy deadline this year.
Many employers have gotten used to preparing their ACA Form in time for distribution in early March and the e-file deadline on March 31. However, this year all forms must be complete and ready for distribution on January 31, 2022!
The team at ACAwise understands that this is a big change to the ACA reporting plan for many employers, so we are here to help. By locking in your ACA reporting spot with ACAwise, we can help you get started and prepare your forms in time for the recipient copy deadline.
Getting Started with ACA Reporting for 2021 Tax Year
Whether you need ACA codes, a postal mailing solution, state mandated e-filing solutions, or even prior year filing, ACAwise offers a flexible option to meet your needs!
ACAwise is the ACA reporting vendor that can help you meet your requirements easily! Our team of experts monitors all IRS updates to ensure that you have the information you need to file accurately and on time.
