If you’re like many business owners, your attention span and patience for understanding the current Affordable Care Act (ACA) requirements wore thin long ago. Will it be repealed? Replaced? What changes will we see? What are you required to do under the current legislation? The only thing that may seem clear at this point is that nothing is clear! Meanwhile, the IRS has announced that it is still moving forward with ACA reporting on the 2017 tax year with the 2018 deadlines. During the first week of October 2017, they published final forms and instructions to help employers prepare for reporting on health coverage they offered to their employees in the 2017 year. While Congress hurls daggers back and forth across the aisles, we’re here to arm you with the latest guidelines and reporting requirements so you may prepare for year-end 2017.
ACA Reporting Deadlines for 2018
FORM 1095-C and FORM 1095-B
Due to employees Wednesday, January 31, 2018
Employers are responsible for furnishing their employees with either Form 1095-C or Form 1095-B by Wednesday, January 31, 2018. Employers are still responsible for filing copies with the IRS by Wednesday, February 28, 2018, if filing by paper or Monday, April 2, 2018, if filing electronically (same as Form 1094-C or Form 1094-B).
Which do you file?
Companies providing minimum essential coverage to an individual during 2017 must file an information return reporting the coverage. If an employer had at least 50 full-time employees, including full-time equivalent employees (FTEs) on average, the employer is considered an Applicable Large Employer (ALE), is subject to the Employer Shared Responsibility Provisions of the ACA, and is required to file Form 1095-C. Employers with fewer than 50 FTEs are not subject to the shared responsibility provisions. If no minimum essential coverage was provided to employees, no reporting is required. If coverage was provided, Form 1095-B should be filed.
These forms help employees complete their individual tax returns by providing important information regarding their health coverage for the previous calendar year. On Line 61 of individual tax returns, employees must show whether they or their family members had minimum essential coverage.
Employers should report the following:
- Proof of Minimum Essential Coverage (MEC)
- Employee ID number
- Social security numbers of the employee and his/her dependents (not spouse)
FORM 1094-C and FORM 1094-B
Due to the IRS via paper: Wednesday, February 28, 2018
Due to the IRS electronically: April 2, 2018
This form functions as “proof” that Applicable Large Employers (ALEs) provided the coverage they were required to under the Employer Shared Responsibility Mandate. It also functions as the cover sheet used to transmit forms 1095-C or 1095-B to the IRS.
ALEs with more than 250 full-time equivalent employees (FTEs) are required to file electronically. Those with fewer than 250 may file on paper or electronically.
Employers with less than 50 FTEs who voluntarily provided minimum essential coverage and therefore filed Form 1095-B for all covered employees, should also file Form 1094-B.
FORM 8809 (Extension Request)
Employers who expect to miss the stated deadlines should file for an extension. To apply for an extension, submit FORM 8809 on or before the due date.
Failure to file complete and accurate Form 1094-C or Form 1094-B by the form deadline will result in penalties equal to $250 per form, not to exceed $3 million per year. Failure to file and furnish correct information on Form 1095-C or Form 1095-B could result in a $500 per form penalty for employers.
Since the required reports are somewhat time-consuming to complete manually, consider outsourcing the process to a 3rd party. GYM HQ utilizes Paychex as our preferred payroll platform for our clients. They offer ACA reporting as an add-on service. This is a great way to ensure that reports are accurate and timely. If you’re preparing the filings in-house, start preparing now.
- Ensure you understand how to complete all the required forms. Instructions can be found on the IRS website.
- Start determining the reporting you’ll need to pull from your payroll software and benefits website in order to complete the required forms. Sometimes this involves building out custom reporting.
- Determine if you qualify as an Applicable Large Employer (ALE). See our guide on this.
- Start communications with your staff on what they should expect. Three primary messages to convey are: what form they’ll receive (Form 1095-C or 1095-B), why they should care (information is needed to file their taxes), and when they should expect to receive this form (by January 31st).