May Due Date for Filing ACA Forms to the IRS

The February 28th deadline has passed for distributing the 1095-B and 1095-C forms to your employees, and now the upcoming deadline to watch for is May 31st. The Affordable Care Act requires through section 6056 that applicable large employers (ALE) file their 1094-B, 1095-B, 1094-C and 1095-C forms with the IRS to share information on the coverage of health insurance offered (or not offered) to employees.

An applicable large employer is any business that employed at least an average of 50 full-time employees on business days during the previous calendar year. A full-time employee generally includes any employee who was working on average at least 30 hours of service per week and any full-time equivalents. 

Reporting Requirements

As an ALE, the reporting requirements of section 6056 ask that an employer filing 250 or more information returns must file the returns electronically. With employers filing fewer than 250 returns, electronic filing is optional. As a general method of reporting, each ALE member may gratify the requirement to file by sending in a Form 1094-C (transmittal) and, for each full-time employee, a Form 1095-C (employee statement). The IRS uses this information from the forms to find if the ALE’s employees are eligible for the premium tax credit under section 36B.

IRS Grace

Employers: Be aware that there is no grace from the IRS when it comes to filing the new ACA forms. If your business has been offering health insurance to employees the whole time, even if you followed the ACA regulations with coverage, you will still need to produce the information from forms 1095-C and 1094-C. 

If your company did opt out (either by choice or by neglect) of paying for a health insurance plan for employees, you still are required to file that information to the IRS. The penalty associated with that is what’s known as the IRS sledgehammer penalty. The sledgehammer penalty ranges from $2000 to $2084 per-employee. If your company did offer coverage to your employees, but that coverage did not meet the ACA standard of minimum value, you could be penalized with the tack hammer penalty. This penalty ranges from $3000 to $3126 per-employee.

Late Reporting Penalties

An ALE that doesn’t comply with the reporting requirements is subject to what’s known as the general reporting penalty. These provisions fall under section 6721 (incorrect information returns filed) and section 6722 (incorrect payee statement filed). In the past, the fine for not filing with the IRS used to be $100 per required return. On December 31st, 2015 the IRS changed the fines to an increase of $500 per required form if not filed at all without any cap. On that same date they increased incomplete or incorrect statements filed to a fine of $250 per return with a cap of $3 million a year.  

If you haven’t already sent in your company 1095-C and 1094-C forms, these numbers should inspire you to do so (and do so correctly)! Having software that assists you in keeping track of employee coverage comes in handy with end-of-year filing. Keep that option in mind for 2016 filing. For more information on how you can stay prepared all year long with ACA filing, visit our ACA reporting page for further details.