The Internal Revenue Service (IRS) has issued draft reporting forms for the purpose of filing information necessary to enforce the Employer Mandate. The 2020 draft version of the applicable forms can be found below (with finalized versions expected to be released later this year):

Draft version of Form 1095-C

Draft version of Form 1094-C

In general, applicable large employers (i.e. 50 or more full-time equivalent employees) must complete one Form 1095-C for anyone who was a full-time employee in 2020. Additionally, one Form 1094-C must be completed on behalf of the employer. The due date to submit these forms is February 28, 2021 if filing manually and March 31, 2021 if filing electronically. Employers filing 250 or more forms must complete the reporting electronically.

The IRS also recently updated its Q&A guidance pertaining to penalty amounts for non-compliance with the Employer Mandate. The penalty amounts for 2020 and 2021 are shown below:

• 2020 “Failure to Offer” Penalty: $2,570
• 2020 “Not affordable/No Minimum Value” Penalty: $3,860
• 2021 “Failure to Offer” Penalty: $2,700
• 2021 “Not Affordable/No Minimum Value” Penalty: $4,060

The "Failure to Offer” penalty applies when an applicable large employer does not offer minimum essential coverage to at least 95% of its full-time workforce. The penalty applies if one or more full-time employees receives an advanced premium tax credit on the Health Insurance Marketplace.

The formula to calculate the “Failure to Offer” penalty for the 2020 year is as follows: (Total # of full-time employees – 30) x $2,570

The “Not Affordable/No Minimum Value” penalty applies when minimum essential coverage is offered to at least 95% of an employer’s full-time workforce, but the coverage is unaffordable and/or does not provide minimum value to some or all employees. This penalty applies to employees who opt-out of the employer’s coverage and receive an advanced premium tax credit on the Health Insurance Marketplace.

The formula to calculate the “Not Affordable/No Minimum Value” penalty for the 2020 year is as follows: Total # of full-time employees who receive an advanced premium tax credit x $3,860.

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