aca reporting 2017

Employers and insurers that provide minimum essential coverage are subject to the reporting requirements of Internal Revenue Code section 6055 to support enforcement of the individual mandate. Applicable large employer members are subject to the reporting requirements under IRC section 6056, which requires information about the health care coverage offered to full-time employees. For self-insured plans, Form 1095-C must also be provided to any individuals who enrolled in qualified coverage, which may include non-full-time employees and any covered spouses and dependents. For calendar year 2017, Forms 1094-C and 1095-C are required to be filed by February 28, 2018, or April 2, 2018, if filing electronically.

Reporting is required by employers with 50 or more full-time (or full-time equivalent) employees, insurers, or sponsors of self-funded health plans on health coverage offered. Reporting is required to ensure that individuals have the required minimum coverage, individuals who request premium tax credits are entitled to them, and ALEs are meeting their shared responsibility obligations. The regulations under section 6056 provide further guidance on the information reporting requirements for ALEs, and the regulations under section 6055 provide guidance on the information reporting requirements for providers of minimum essential coverage. The Instructions for Forms 1094-C and 1095-C and the Question and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C provide guidance on how to complete Form 1094-C and Form 1095-C. Recently, the IRS has intensified enforcement of information reporting compliance under the Affordable Care Act .

aca reporting 2017

This is the case even if a particular ALE Member does not employ enough employees to meet the 50-full-time-employee threshold. See Employers Subject to the Employer Shared Responsibility Provisions and Identification of Full-Time Employees in the Employer Shared Responsibility FAQs for more information about calculating the number of full-time employees . More detail about these information reporting requirements under section 6056 is available on the Information Reporting by Applicable Large Employers page. Despite the repeal of the individual mandate, employers should NOT modify any of their ACA processes. For 2017 ACA reporting and compliance, employer mandates remain in effect, as do the laws that address penalties for non-compliance and employer assessments. For 2017 ACA reporting and compliance, employers are required to track the hours worked of part-time and variable-hour employees to determine if they should be offered coverage like all other full-time employees. Starting in 2016, however, all organizations with 50 or more full-time employees or equivalents must insure 95 percent of their full-time employees to avoid liability under the ACA’s shared responsibility provisions, and the resulting penalties.

Who Is Required To Report Under Section 6056?

For more information on reporting of enrollment information for non-employees, see the Instructions for Forms 1094-C and 1095-C. For purposes of the information reporting requirements, each ALE Member must file Forms 1094-C and 1095-C with the IRS and furnish Form 1095-C to its full-time employees, using its own EIN.

The DGE must agree that it is the person appropriately designated by the governmental unit to report for the governmental unit and that it is responsible for reporting under section 6056 on behalf of the ALE Member. Thus, the DGE is subject to the information reporting penalty provisions of sections 6721 and 6722.

  • To avoid penalties, it will be necessary to show that qualifying coverage was offered to the employee, “which is why employers should have a system in place for tracking and recording health benefits. Otherwise, you’re going to be chasing your tail as these come trickling in,” he said.
  • The Affordable Care Act added sections 4980H and 6056 to the Internal Revenue Code.
  • Plan sponsors may need to update their reporting systems and TPAs must be prepared to gather all required information.
  • Thus, an employer that employed fewer than 50 full-time employees (including full-time equivalent employees) during the preceding calendar year is not subject to the reporting requirements of section 6056.
  • As a reminder, Forms 1095-B/1095-C,Employer-Provided Health Insurance Offer and Coverage, are submitted to the IRS and copies provided to full-time employees.

Until employers are told otherwise, they should plan on meeting the current deadlines. Employers or other coverage providers that fail to comply with these extended due dates remain subject to penalties for failure to furnish and file on time.

Irs Releases Draft Of 2017 Instructions For Aca Reporting Forms

The IRS has finalized the forms and instructions that employers will use for 2017 reporting under the Affordable Care Act . Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their 2017 returns. In addition, individuals do not need to send the information they relied upon to the IRS when filing their returns but should keep it with their tax records. Copies of the draft Form 1094-B, Form 1094-C, Form 1095-B, and Form 1095-C can be obtained from the IRS. The draft instructions for Forms 1094-B and 1095-B and Forms 1094-C and 1095-C are also available. Recently, the Internal Revenue Service issued draft forms and instructions to assist employers in understanding their obligations for 2017.

aca reporting 2017

Sign up to receive email notifications for upcoming events and important industry news. Note that the Tax Cuts and Jobs Act, signed into law today by President Trump, effectively repeals the individual mandate as of 2019. 1.The 2017 TASC ACA Wizard is designed for the coding associated with active Full-Time Employees. For coding other than active Full-Time Employees (e.g., Terminated Employees, Part-Time employee, COBRA-eligible individuals and Retirees), please see items 3-5 below.

Laurie Savage is Senior Compliance professional, leading robust legislative research efforts analyzing intricate policy, including the Affordable Care Act , paid leave, tax reform and recently, legislation responding to the COVID-19 pandemic. If employers owe the IRS they will begin receiving demand for payment notices for the amount owed. Ignoring these notices will only result in another notice being sent for the amount owed, and continued failure to square up on the financial obligation eventually might culminate with an intent to levy notice from the IRS. At this point, an employer CARES Act who has been determined to be an ALE and still has errors that remain uncorrected faces a more complex path, including appealing the assessment determined based on changes made to 226-J or failure to respond to 226-J. All reporting will be for the 2017 calendar year, even for non-calendar year plans. Find the answers to all your clients’ questions about Social Security and Medicare in this essential Quickfinder handbook by Thomson Reuters Checkpoint. This publication provides technical guidance about composing and successfully transmitting compliant submissions to the IRS.

Affordable Care Act Aca Reporting 2017

The reporting requirements under section 6056 apply to each ALE Member separately. While the newly passed tax reform bill will release individuals from the federal mandate of the Affordable Care Act for health insurance, employers are still on the hook for 2017 ACA reporting and compliance — as well as for all upcoming years as long as the law is in place. Employers of any size that sponsored a self-insured health plan providing minimum essential coverage must distribute to enrolled employees and file with the IRS Form 1095-B, showing health plan enrollment. If employers are hoping the good-faith transition relief will help tamp the financial hit, they should know that this is only good through the 2020 tax filing year – and it might only mitigate assessments for inaccurate returns.

There has been no change to the deadline for filing 2017 returns with the IRS, and taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their tax returns. ALE’s who offer insurance with minimum essential coverage to at least 95 percent of all, or all but 5, full-time employees and their dependents . If a full-time employee not offered adequate or affordable coverage receives premium tax credit, the penalty is an annualized amount of $3,000 for each full-time employee not offered adequate or affordable coverage who received a premium tax credit. Failure to comply with the ACA information reporting requirements can result in penalties imposed under the general reporting penalty provisions of Internal Revenue Code section 6721 and section 6722. These reporting penalties, along with any additional payments assessed under the employer mandate, may present a significant liability for a non-compliant employer subject to the ACA. However, a waiver of penalty, including abatement of information return penalties for reasonable cause, may be available for certain failures.

aca reporting 2017

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. The IRS will use the information provided on Form 1094-C and Form 1095-C to administer the employer shared responsibility provisions.

The notice does explain that the employer might be assessed a penalty for failure to file and furnish the returns. The IRS has a series of lettered and numbered forms it uses to inform and instruct employers on what action the employer must take. With ESR information reporting provisions, the initial contact with the employer might begin with Letter 5699, which indicates the IRS believes the employer might be an ALE aca reporting 2017 and details the requirements and obligations for filing. As a reminder, Forms 1095-B/1095-C,Employer-Provided Health Insurance Offer and Coverage, are submitted to the IRS and copies provided to full-time employees. Forms 1094-B/1094-C,Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, function as a summary for the Forms 1095 and are also filed by employers with the IRS.

Forms & Instructions

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.

Fines can be financially devastating, so businesses should respond to any notice from the IRS to avoid additional IRS action QuickBooks or penalties. Information is reported on a calendar-year basis regardless of the employer’s health plan year or fiscal year.

What The 2017 Tax Reform Actually Means For Employers

Under the ACA, governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Based on the ACA information reports filed, the IRS began issuing notices for the employer mandate penalties at the end of 2017, beginning with the 2015 tax year. Since then, the IRS has moved to issuing these notices up to the 2017 tax year in recent months. IRS treatment of ACA compliance has reportedly grown stricter on recent notices, with more follow-up inquiries on corrected reporting errors and fewer routine grants of 90-day extensions to respond.

Specifically, the safe harbor requires an employer to solicit the TINs of the employee and his or her dependents initially, and at certain prescribed times thereafter. A written solicitation must be made on a Form W-9 or on a document that that is “substantially similar” to Form W-9. An ALE Member may file more than one Form 1094-C, provided that one of those transmittals is an Authoritative Transmittal reporting aggregate employer-level data for the ALE Member. See the Instructions for Forms 1094-C and 1095-C for further details about the Authoritative Transmittal. Section 6056 applies to all employers that are ALE Members, regardless of whether the employer is a nonprofit, tax-exempt or government entity . “Employers, with a year of ACA reporting under their belt, realize the scope of this task,” said Praisner.

Aca Reporting Deadline Extended By 30 Days

I was an ALE for calendar year 2015 and already filed Form 1094-C and Forms 1095-C with the IRS using name of employer and employer identification number on date. The IRS is currently issuing notices to large employers to disclose whether they complied with the ACA reporting duties or not. This Client Alert is for information purposes only and should not be construed as legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. If you have any questions or would like additional information, please reach out to a member of Maynard Cooper’s Employee Benefits and Executive Compensation team. “Plan Start Month” continues to be optional for 2017 , but may be required for 2018 reporting.

If you have aself-funded health plan you must report any Part-Time Employee , Retiree and COBRA-eligible former/terminated Employee that was also a Full-Time Employee during any time month of the reporting year (i.e., the calendar year being reported). To code for these individuals, use the Wizard to determine coding for the months they were a Full-Time Employee. For those months they were not Full-Time Employees, please refer to the Client Administration Manual (Section titled “Important IRS Updates – IRS Form 1095-C on pages 31 and 32) for coding instructions. 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. Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 4, 2019, to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of Jan. 31. An ALE Member that does not have any employee who was a full-time employee in any month of the year is not required to report under section 6056. An ALE Member is required to report if it has one or more employees who were full-time employees for any month of the year.

Author: David Ringstrom

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