The Most Common Mistakes Made on Form 1095 That Will Lead To Penalties

When it comes to ACA mandated reporting, there are a lot of factors involved. As the March 02 recipient copy deadline approaches, we know that ALEs are beginning to gather their information and assess their filing situation.

It may be tempting to try to “go it alone” when it comes to your ACA reporting, but if you are inexperienced with this sort of reporting then it may be best to call in an expert. The cost of penalties is high enough to warrant the cost of professional services.

To help mandatory reporters assess their filing situation, the experts at ACAwise have put together this article. These common filing mistakes led many of our clients to seek out our services. 

Mistake 1: Errors In Form 1095 Codes

The Form 1095…four pages of itemized lines that require specific 1095 codes based on the health insurance offer that your business made to its employees. You may feel like you’re drowning in a sea of single digits and number combinations. 

You’re not alone, many errors can occur at this stage of the process. While a 1A and 1E sound pretty similar they indicate different types of health insurance offers on line 14 of 1095. This seemingly small error can add up to a big penalty. 

ACAwise was created to correct these types of errors throughout the preparation and filing process. Our software will generate your 1094 and 1095 forms for you and alert you with any errors. 

ACAwise can even generate these codes for you using the data that you provide. If you need personalized assistance at any point, our support team is here to guide you through it!

Mistake 2: Not Understanding The Status Of Your Employees

This will become a huge issue when you begin to compile your employee data and file. Since the purpose of ACA reporting is to inform the IRS about your employee’s insurance coverage, this information must be FLAWLESS. 

You are proving to the IRS that you have made an affordable offer of coverage to your full-time and full-time equivalent employees. If you fail to report this information completely and correctly, you will find yourself penalized by the IRS. 

This is what the IRS expects of you:

You must make an offer of affordable health insurance coverage to employees that work either 30 hours a week or 120 hours a month. This offer must meet the specified minimum essential coverage requirements. These employees must receive an offer within 90 days. Calculate your ALE Status

Experiencing information overload? Our team of experts is here to walk you through the process and take over completely when it comes to determining your employee’s codes. You don’t have to understand the nuances of ACA reporting because we do!

Mistake 3: Not Understanding Your Status As An Aggregate

So many employers have confused their status as an applicable large employer by not realizing that they are an aggregate business. Here’s what causes the confusion…

An employer may think, “I’m not an applicable large employer, I have less than 50 full-time and full-time equivalent employees.” 

They may be correct, however, you may be an aggregate employer. If you have a parent company or subsidiary company that you are affiliated with you must count ALL of these employees. Here’s an easy example. 

A restaurant group that consists of 5 different restaurants would be considered an aggregated employer. Even if each restaurant has only 20 full-time workers, collectively they have 100 full-time workers. They are considered an applicable large employer by the IRS. 

Don’t Get Stuck With Preventable Penalties

All of these mistakes lead to ACA penalties. You could be penalized up to $270 per form based on how late you file and how long it takes you to correct these errors with the IRS.

Failure to file can cost you up to $550 per return. As you can see, that will add up quickly!

Our team can prevent penalties by creating a reporting game plan for your business. Once we get your data, there is very little work required on your end. We update you and notify you of any errors throughout the process. We take a VERY complicated process and make it simple. You don’t have to “go it alone”, reach out to an expert today!

With ACAwise you can prevent these mistakes. For accurate and timely filing, begin the process now with ACAwise. You can count on error-free 1095 Forms every time!

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