Employers Still Required to Submit 2018 ACA Reports
The Tax Cuts and Jobs Act reduced the penalty for not carrying health insurance coverage to $0 for individuals starting in January 2019. But, the employer mandate to provide insurance and the related ACA reporting requirements remain.
ACA Reporting
Under the ACA, Applicable Large Employers (“ALEs”) are required to offer full-time employees and their dependents affordable minimum essential health insurance coverage or face a penalty. ALEs are generally those that employ fifty or more full-time and full-time equivalent employees in the prior calendar year.
The Internal Revenue Code requires ALEs to annually file information returns with the IRS and provide statements to employees relating to their health insurance coverage. ALEs satisfy this requirement by submitting IRS Forms 1094 and 1095 annually. These forms report information about the health coverage offered by the company and must be completed by all ALEs including those who have elected not to offer health insurance.
Due Dates and Filing Requirements
In November 2018, the IRS issued a notice extending the 2018 filing deadline for Form 1095-B, Health Coverage, and 1095-C, Employer Provided Health Insurance Offer and Coverage. This is an automatic 30-day extension from the original due date of January 31, 2019 so it is not necessary for employers to file for an extension.
| Reporting Requirement | 2019 Deadline |
| Filing Form 1095-B and 1095-C in paper format to the IRS | Feb. 28, 2019 |
| Providing individuals Form 1095-B and/or 1095-C | March 4, 2019 |
| Filing Forms 1095-B and 1095-C in electronic format to the IRS | April 1, 2019 |
Any employer filing 250 or more information returns during a calendar year must file their ACA reporting electronically. Failure to file electronically will likely result in an IRS notice.
Penalties and Notices
Last year, the IRS began assessing employers with ACA penalties and many businesses across the country received notices. The IRS penalties initially assessed were based on the information, or the lack thereof, reported by employers on their Form 1094s and 1095s. Some employers to date have been assessed penalties in excess of $1,000,000.
The IRS has been carefully reviewing the forms submitted and is also issuing notices for incomplete forms and forms submitted in an incorrect format. The IRS has been on the lookout for employers that may have missed filing their ACA reports. They have been reviewing the number of W2s filed by companies and in some cases have sent letters inquiring why employers have not filed the necessary ACA forms.
Employers should be vigilant if they receive any correspondence from the IRS regarding their ACA reporting because the timelines required to respond to the notices are often very short and additional penalties can be assessed for failure to respond.
Next Steps
Employers should continue to ensure that they are meeting all of their ACA reporting requirements to avoid penalties. CLA has a specialized ACA compliance team that is here to assist you with your filings, help respond to notices, and answer any questions you may have. Please contact us.
Amanda Garnett is a principal in the financial institutions practice of CliftonLarsonAllen (CLA) from Peoria, Illinois. She currently leads the firm’s Midwest financial institution tax team and serves institutions ranging in size from $15 million to $3.5 billion in total assets. In addition to tax compliance, Amanda assists clients in the areas of tax consulting, mergers and acquisitions, and regulatory reporting. She also routinely teaches courses for banking associations across the country.
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