Reporting Requirements For The Affordable Care Act Still Exist
The 1094-C and 1095-C are still a going concern, and not just because the IRS uses what’s on the 1095-C to determine if you’re going to get penalized. Large employers (typically considered as having 50 or more employees) are required to file 1095-C forms every year to send to their employees and the IRS.
These forms make record of the company’s ACA compliance: did you offer health care? Did the employee take it? The forms need to make their way to the IRS by April 1 of 2019, and the IRS can slap you with a penalty for not providing these forms to them, not providing these forms to your employees, and disregarding the necessary filing requirements. You can also be penalized if your forms arrived on time but were incomplete or incorrect.
If your 1095-C is incorrect, not only will you get penalized for the errors, but that could lead to even higher penalties if the IRS decides to use your 1095-C to determine how it will enforce “employer shared responsibility payment” (ESRP) penalties on you. More on ESRPs next.
Benefits Pro reports that the IRS is currently enforcing what is called “employer shared responsibility payments” (ESRP) penalties against those employers who didn’t meet the Affordable Care Act requirement of offering health coverage to their full-time employees. So if you have 50 or more full-time employees, you still need to offer them medical insurance for 2019 under current Affordable Care Act guidelines, and your ACA compliance for 2018 hinges on whether or not you offered them coverage for this year.
If you don’t offer your full-time employees health insurance, you will receive your IRS penalty in the form of a 226-J letter. The 226-J cites information from the 1095-C you filed for the coverage year in question, and the penalties can be the cost of coverage plus penalties of $2,000/ year per full-time employee, in some instances even including those that elected health coverage from you.
If you find yourself the unlucky owner of a 226-J letter, you have 30 days to respond to the IRS via Form 14764, which the IRS typically encloses with your 226-J. If you think the IRS is erroneous in their claims against your coverage offerings, you can file a 14765 to challenge them.
If you decide to fight the 226-J letter, there is a chance the IRS will accept your explanation and lower your levied penalty to $0 using the 227-K letter.
The Affordable Care Act Still Requires A Benefits Summary Disclosure
It’s no surprise that employees like to shop around for health insurance, especially in this market, and under the ACA as it currently stands, you owe your employees a summary of benefits and coverage to make it easier for them to comparison shop.
These summaries, dubbed SBCs, need to be provided during an employee’s open enrollment period. SBCs also need to be given to the employee the moment they become eligible for health coverage, or the moment they ask you for an SBC directly. Failure to provide a summary of benefits and coverage can result in a penalty of $1,128 per participant.
Are you stressed about ACA reporting yet? Don’t be! ACAwise provides full-service ACA reporting designed especially to get your 1094 and 1095 forms into the right hands with time to spare. Schedule an appointment with one of our account managers today.