Benefits Buzz

Employer ACA Reporting and Extension Requests

Posted on November 13th, 2015

The new reporting requirements that some employers will be subject to starting next year, as required by the Affordable Care Act (ACA), will be used to help the Internal Revenue Service (IRS) enforce the Individual and Employer Mandates, and it will also help the IRS administer subsidy eligibility in the Exchanges.

The following reporting forms will be the responsibility of the employer to complete:

There are two upcoming deadlines that employers must be aware of:

  • Forms must be filed with the IRS  by February 28, 2016 if filing manually or March 31, 2016 if filing electronically.
  • Copies of the reporting forms must be provided to employees by January 31, 2016 (technically February 1, 2016 since January 31st falls on a Sunday).

The reporting is a new requirement, and many employers are trying to figure out how to complete it by the applicable deadlines. Some good news for employers is that the IRS has recently updated Form 8809, which will give employers an automatic 30-day extension to submit the reporting to the IRS provided Form 8809 is submitted before the original deadline. An additional 30-day extension may be requested by submitting a second Form 8809 before the end of the first extension period. Extensions after that are not guaranteed, and are usually only granted if an employer can demonstrate that there are extenuating circumstances which are causing delays.      

It’s not entirely clear yet how an employer can request an extension to provide copies of the forms to employees. The IRS has indicated employers may make this request by submitting a letter that contains certain information, however, there does not appear to be any guarantee that an extension would be granted. The IRS is expected to release more information on making this extension request.

Employers should keep a close eye on the deadlines and the process for requesting an extension if one is needed.  Failure to submit a form to the IRS on time can result in a $250 penalty per employee. Additionally, failure to provide a copy of the applicable form to employees can result in a $250 penalty per employee. That equates to a $500 penalty per employee if both deadlines are missed, capped at a $3 million dollar maximum penalty per year.

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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice. 

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