While it seems a lot is up in the air with healthcare in America, employers are asking about the Affordable Care Act and their responsibilites. While the GOP continues to make efforts to repeal (and possibly replace) the ACA, the current rules remain in place. The IRS is still moving forward with ACA reporting on the 2017 tax year with 2018 deadlines. As an employer, you cannot afford to wait to see how things play out in Congress. The risks are too high. Employers must continue tracking ACA compliance and be prepared for ACA reporting in 2018.
To address some confusion many employers have had surrounding ACA reporting deadlines, we’re giving you the dates Human Resources needs to know about ACA reporting deadlines in 2018.
ACA Reporting Deadlines 2018
Due to employees Wednesday, January 31, 2018
Employers are responsible for furnishing their employees with a Form 1095-C by Wednesday, January 31, 2018. Employers are still responsible for filing copies of Form 1095-C 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).
Form 1095-C helps 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 on Form 1095-C:
- Proof of Minimum Essential Coverage (MEC)
- Employee ID number
- Social security numbers of the employee and his/her dependants (not spouse).
To IRS via Paper: Wednesday, February 28, 2018
To IRS Electronically: April 2, 2018
Think of Form 1094-C as the proof that Applicable Large Employers (ALEs) did what they should according to the IRS and the Employer Shared Responsibility Mandate.
Under Code sections 6055 and 6056, ALEs must use Form 1094-C to report required information about whether or not the employer offered affordable minimum essential health coverage and enrollment in minimum essential health coverage for eligible employees. Form 1094-C transmits forms 1095-C to the IRS.
Some employers have the option to file their ACA reporting by paper or electronically. However, any ALE filing more than 250 of any type of form MUST file ACA information returns electronically. If you will be filing less than 250 forms, you may file by paper, though the IRS encourages electronic filing.
Keep in mind the reporting deadline to file by paper comes one month before the electronic reporting deadline.
ACA Reporting 2018 FAQs
Can you file for an extension for ACA reporting forms?
A lot of people were confused by extensions in previous years. At first, you had to apply for an extension. Then, the IRS extended the ACA reporting deadlines for all employers across the board and discontinuing any individual exemptions.
What should employers expect in 2018?
Expect things to go back to the original plan: set deadlines with the ability to apply for extensions on an individual employer basis.
To apply for an extension to file information return forms with the IRS, submit a Form 8809 on or before the due date of the return for an automatic extension. This form does not require a signature. For an additional 30-day extension, the filer or an authorized agent must sign the form.
What are the IRS penalties for late or incomplete Form 1094 & Form 1095?
Failure to file complete and accurate Forms 1094-C 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 could result in a $500 per form penalty for employers.
What are the next steps for HR & employers?
Unlike other information returns and forms like W-2s, the 1094 and 1095 forms can require information from multiple systems of record for one annual filing. This means employers need to gather tracked information from HR, payroll, benefits, etc. Waiting until the beginning of 2018 to act on ACA tracking and reporting could leave your company facing steep financial penalties.
Get a head start on ACA reporting for 2018:
- Determine if your business qualifies as an ALE according to the Affordable Care Act and Employer Mandate.
- Ensure the correct systems are in place for accurate ACA reporting and compliance for your business. Do you have the right tools for tracking and documenting employee status, benefits eligibility, and benefits enrollment?
- Review the IRS reporting information page for Form 1094 and Form 1095 instructions and updates. Review additional instructions for employers for Form 1094-C and Form 1095-C.
Don’t let your organization get caught with big penalties. Start preparing your business today for ACA compliance and reporting in 2018.
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