With IRS Filing Deadlines Less Than 30 Days Away,
First Capitol Consulting Asks, “Are You Ready?”
Information on Meeting ACA Filing Requirements for the 2017 Tax Year
Without Triggering Employer Shared Responsibility Payments
LOS ANGELES, CA — February 8, 2018 — The first deadlines for filing Affordable Care Act (ACA) information returns for the 2017 tax year are less than 30 days away. Organizations not preparing their annual ACA filings to the IRS should begin doing so immediately to meet IRS filing deadlines.
Who Must File
Organizations (including certain of their related entities) with 50 or more full-time or full-time equivalent employees, referred to as Applicable Large Employers (ALEs), are required to make annual information filings with the IRS under sections 4980H and 6056 of the Internal Revenue Code.
Under section 4980H, an ALE is required to offer health coverage to its full-time employees (and their dependents) or potentially be assessed an employer shared responsibility payment (ESRP) if at least one full-time employee receives a premium tax credit for obtaining healthcare coverage through the Healthcare Marketplace.
Under Section 6056, an ALE is required to file information returns with the IRS to identify whether it has offered health coverage to its full-time employees (and their dependents) and information about the offer of coverage. This is done using IRS forms 1094-C and 1095-C. ALEs must also furnish a copy of the information to their full-time employees.
Form 1094-C is the ALE’s transmittal form and provides 1095-C summary information. It includes:
- ALE’s address, phone number, employer identification number
- Numbers of full-time and total employees
- Contact person
- How many 1095-C forms are being submitted
- Confirmation of whether health coverage was offered to 95% of the ALE’s full-time employees and their dependents
Form 1095-C is provided to the IRS and copies are also provided to each full-time employee. The form provides the IRS with the details of the health coverage provided to the ALE’s full-time employees and their dependents, including:
- Healthcare coverage offered to the employee, spouse and dependents
- Lowest-cost premium available to the employee
- Months of the year when the coverage was available
ALEs that are self-insured may use forms 1094-B and 1095-B to provide information about other covered individuals to the IRS.
Upcoming IRS Deadlines
- February 28, 2018
Deadline to file 1094-C/1095-C schedules if paper filing
- March 2, 2018
Deadline to furnish 1095-C schedules to employees (extended from January 31)
- April 2, 2018
Deadline to file 1094-C/1095-C schedules if electronic filing
- July 31, 2018
Form 720 (PCORI) due from self-insured plans (includes self-insured employers)
Avoid Triggering Penalties
ALEs should review their ACA filing information to be sure they have completed the forms properly, including confirming that they have appropriately applied IRS methodologies in determining their number of full-time employees. Not properly completing the IRS forms and overcounting the number of full-time employees are the two common errors that have triggered IRS Letter 226J notices that apply ESRP assessments to ALEs that have failed to comply with the ACA.
The ACA Resource Center: https://trusaic.com/acaresourcecenter/
Two Errors that are Triggering ESRPs from the IRS: https://acatimes.com/the-three-errors-that-are-triggering-aca-tax-penalties-from-the-irs/
Infographic on Responding to IRS Letter 226J: https://trusaic.com/irs226j-response-infographic/
Consider an audit of your 1095-C forms: https://trusaic.com/spot-audit/
First Capitol Consulting, Inc., is a data and analytics company with a focus on optimizing client performance around tax and regulatory compliance. We provide robust data and analytic solutions for HR, tax credits, regulatory compliance, and data intelligence services. For more information, go to firstcapitolconsulting.com.
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