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Update on Status of the ACA and IRS Reporting Requirements

Update on Status of the ACA and IRS Reporting Requirements
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by Jason Cogdill on 15 February, 2017 with Add new comment

As of today, the ACA remains the law of the land. Despite all of the news and chatter from Washington regarding potential repeal, no developments of consequence have transpired.

The most pressing requirement for employers is the imminent deadline for employers that must comply with the IRS reporting requirements that are part of ACA’s employer mandate (February 28 for employers submitting in hardcopy; March 31 for employers submitting electronically). No suspension or delay of these requirements has been announced. A further update is below.

We have started to see minor impacts of the President’s executive order in January. These include:

  • Last week, the IRS announced without fanfare that it would not reject individual or joint tax filings that failed to answer affirmatively the question regarding health coverage (Line 61 of Form 1040). This could be the first step toward elimination of the individual coverage mandate.
  • CMS has announced an extension of the government’s policy on transitional plans (non-grandfathered plans that remain exempt from certain ACA market reforms). This will allow carriers to continue to offer these plans through at least 2018. Full text of the announcement is available here.

ACA Reporting

While full or partial repeal of the law remains a possibility for coming months, as of now employers will need to complete and submit the reporting. It may be that this is homework that is never checked, but compliance with the requirement will remove any potential risk.

The primary reporting requirements apply to employers that were Applicable Large Employers (ALEs) for 2016. ALE status for 2016 was based on whether the organization – by itself or combined with any other entities under common ownership – had 50 or more full-time employees, including full-time equivalents during 2015 measured by a 12-month average.

The initial deadline was February 28, which is the date by which employers submitting to the IRS in hard copy must file a Form 1094-C along with copies of all Forms 1095-C distributed to employees that had full-time status for all or part of 2016. The deadline for electronic submissions is March 31 (required for employers distributing 250 or more Forms 1095-C). Forms 1095-C must be distributed to applicable employees by March 2.

FAQ regarding small self-funded or level-funded plans

A common question has been whether small plans otherwise exempt from reporting (non-ALEs) have to report for 2016 if they had a level-funded or self-funded plan for all or part of the year. The answer is yes. This reporting is accomplished with IRS Form 1095-B and 1094-B. Thankfully for employers that must file these forms, preparation of the forms is simple and straightforward.

For more information this issue, contact us.

Assistance with Reporting

While we do not directly handle reporting, I am involved in education and training on the requirements as part of my ACA compliance work for employers and advisors. I have led training sessions on Forms 1095-C and 1094-C, and if such information would assist your organization, contact us. We also have available a Quick Reference Guide for Form 1095-C (including code “cheat sheet”) and a sample employee communication piece.

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Jason Cogdill

Jason Cogdill

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