The Affordable Care Act (ACA) is the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010. The ACA requires certain employers to report to the IRS annually regarding the health care coverage they offer to full-time employees.
Under Section 6056 of the Internal Revenue Code, an Applicable Large Employer (ALE) must report information on Form 1095-C that discloses if an employer is subject to an assessment of a Shared Responsibility Payment. The report also determines if full-time employees are eligible for a premium tax credit, which helps pay for health insurance if the employee purchases it on the Health Insurance Marketplace. Generally, an ALE is an employer with 50 or more full-time equivalent (FTE) employees. If you are unsure whether your organization is an ALE, contact us to discuss.
If Suttle & Stalnaker prepared your 2020 1095-C forms, we have already sent the 2021 data template. If you have not yet received the information, please give us a call.
If we did not prepare your 2020 forms, please contact Drema Foster, Erica Fuller or Kara Garibian so we can discuss your filing requirements and get you started tracking 2021 information. If you have any questions, please let us know.
REPORTING DEADLINES
The deadlines are as follows:
January 31, 2022 – Form 1095-C must be furnished by ALEs to all full-time employees
February 28, 2022 – Filing of Form 1095-C due for 2021 if filed on paper
March 31, 2022 – Filing of Form1095-C due for 2021, if filed electronically
POTENTIAL PENALTIES
As of this date, the IRS has not announced any updates to penalty amounts for the 2022 filing year.
There are two different circumstances in which an ALE may owe an employer shared responsibility payment. An ALE can be liable for an employer shared responsibility payment if:
- The ALE does not offer coverage or offers coverage to less than 95 percent of its full-time employees (and their dependents), and at least one of the full-time employees receives a premium tax credit to help pay for coverage through a Marketplace;
OR
- The ALE offers coverage to at least 95 percent of its full-time employees (and their dependents), but at least one full-time employee receives a premium tax credit to help pay for coverage through a Marketplace, which may occur because the employer did not offer coverage to that particular employee or because the coverage the employer offered that employee was either unaffordable or did not provide minimum value.
Penalties will also be assessed to an ALE who chooses to not fulfill their year-end 1095-C and 1094-C ACA reporting responsibility or who submits their reporting after the required deadlines.
FINAL EXTENSION OF GOOD-FAITH RELIEF FOR FILING AND FURNISHING
Notice 2021-76 issued October 2, 2020, clarified that 2021 was the final year employers could utilize “Good-Faith Relief.” “Good-Faith Relief” is no longer applicable for the 2022 filing year. IRS penalties for ACA reporting non-compliance are high and can have a significant impact on your organization’s bottom line. Please make sure to include accurate, complete employee information (including full legal employee names, and Social Security numbers, or date of birth) to avoid penalties from the IRS.
Our HR Consulting team has the experience and expertise to help you and your business navigate the far-reaching impacts of the COVID-19 pandemic. Please contact our offices with questions or concerns.