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ACA Reporting Deadlines and Reminders

Posted on November 18th, 2020

The Affordable Care Act (ACA) created two reporting requirements which are spelled out in Internal Revenue Code Sections 6055 and 6056.

Section 6055 requires every provider of minimum essential coverage to report information of those employees and dependents who enroll in coverage. Reporting this information to the Internal Revenue Service (IRS) is still required even though the Individual Shared Responsibility penalty (i.e. Individual Mandate) is $0.

Section 6056 requires applicable large employers (ALEs) to report information about the offer of coverage (or lack thereof) to employees. This includes whether an affordable health plan with minimum value was offered to full-time employees. Section 6056 reporting is used to determine if penalties apply under the Employer Shared Responsibility provisions (i.e. Employer Mandate).

The following information explains the reporting requirements for employers based on their size and the coverage type that is offered:

Small Employers (Non-ALEs, fewer than 50 full-time equivalent employees)

Form 1095-B needs to be completed for each employee or former employee covered on the plan for one or more days in 2020. The insurance company will file these forms with the IRS when coverage is fully insured. Employers who offer a level-funded plan are responsible for completing Form 1095-B, although some insurance companies will complete and file Form 1095-B on behalf of the employer as a value add. Employers who offer an Individual Coverage Health Reimbursement Arrangement (ICHRA) are responsible for filing Form 1095-B with the IRS as well. An accompanying Form 1094-B (known as the transmittal form) must also be submitted by the filing entity.

Applicable Large Employers (ALEs, 50 or more full-time equivalent employees)

Form 1095-C needs to be completed for each full-time employee, which are those employees who work 30 or more hours per week or 130 hours or more per month. The employer is responsible for the completion and submission of these forms. Form 1095-C is divided into three sections. Only the first two sections need to be completed when the offer of coverage is a fully insured plan. All three sections need to be completed when the offer of coverage is a self-funded plan, level-funded plan or an ICHRA. Additionally, if the offer of coverage is a self-funded plan, level-funded plan or an ICHRA, reporting is required for any non-full-time employee who is covered under the plan (e.g. part-time employees, COBRA participants). An accompanying Form 1094-C (known as the transmittal form) must also be submitted by the employer.

Deadlines for Filing

If filing manually, the reporting forms must be submitted to the IRS by March 1, 2021. If filing electronically, the reporting forms must be submitted by March 31, 2021. Entities submitting 250 or more forms must submit the reporting electronically. If an extension is needed, a 30-day extension can be requested by submitted Form 8809 to the IRS prior to the normal due date.

There is also a deadline to furnish a copy of Form 1095-B and/or 1095-C to employees. The due date is March 2, 2021. The IRS has already provided an automatic extension 30-day extension for furnishing the forms to employees. The normal due date is January 31st of each year. Due to the automatic extension, no additional extension for furnishing copies of the forms will be granted.

Form 1095-B (special rule for furnishing copies of the form to employees)

The IRS issued Notice 2020-76 which provides a special rule for furnishing copies of Form 1095-B. For 2020, the IRS will not assess penalties against reporting entities who fail to automatically furnish a copy of Form 1095-B to individuals so long as they furnish a copy to individuals within 30 days of their request and they prominently post information on their website which indicates how a copy of Form 1095-B can be requested. The primary purpose of Form 1095-B was to enforce the Individual Mandate, but there is no longer a federal penalty for failing to be enrolled in minimum essential coverage.

This special rule does not apply to Form 1095-C.

Good Faith Reporting Relief

Good faith error reporting penalty relief will apply once again to the 2020 reporting year. This means employers will not be penalized if they report information that is incorrect or inaccurate, and provided they made good faith efforts to comply with the reporting requirements. However, penalties can still apply if an employer fails to submit the reporting. These penalties are in addition to potential Employer Mandate penalties.

Additional Resources

For more information on Section 6055 reporting, please click here.

For more information on Section 6056 reporting, please click here.

 

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