We’ve heard some employers are confused about whether ACA reporting is required in 2020 for health coverage in the 2019 calendar year. Here’s a reminder that the Affordable Care Act (ACA) is still law and employers must comply with its provisions, including filing forms 1094 and 1095.
Yes, Employers Need to File Forms 1094 and 1095
The International Revenue Service (IRS) is enforcing the employer mandate by sending Letters 226-J to employers it believes owe a penalty. We’ve heard the 2017 calendar year letters started to arrive mid-year 2019. The determination of whether an applicable large employer (ALE) may be liable for an Employer Shared Responsibility Payment (ESRP) and the amount of the proposed ESRP in Letter 226-J are based on information from IRS Forms 1094-C and 1095-C filed by the ALE and the individual income tax returns filed by the ALE’s employees. It is expected that Letters 226-J will be issued for the 2018 calendar year as those 1094-C and 1095-C forms are reviewed and processed by the IRS.
Form 1095-C Deadlines
Employers are responsible for furnishing their employees with a Form 1095-C by Monday, March 2, 2020. Employers are responsible for filing copies of Form 1095-C with the IRS by Friday, February 28, 2020 if filing by paper or Tuesday, March 31, 2020 if filing electronically. Like previous years, IRS Notice 2019-63 extends good-faith transition relief from reporting penalties for incorrect or incomplete reporting for 2019 coverage.
2019 Penalty Relief for Part-Time Employee Enrolled in Self-Funded Plan
IRS Notice 2019-63 extends penalty relief for failure to furnish a Form 1095-C statement to any employee enrolled in a self-insured health plan if:
- The employee is not a full-time employee for any month of 2019
- The ALE prominently posts a notice on its website that 2019 Form 1095-C is available upon request
- The website notice says how to contact the ALE by email, mail and phone; and
- The ALE furnishes a form to any employee within 30 days.
If a part-time employee enrolled in self-funded health coverage requests Form 1095-C, how would an ALE fill it out? The 2019 instructions state the ALE would enter code 1G on line 14 in the “All 12 Months” column or in the separate monthly boxes for all 12 calendar months, and the ALE is not required to complete the rest of Part II of the form.
2020 and Beyond
The IRS is continuing to study whether and how reporting requirements should change, if at all, for future years. The IRS is studying whether an extension of the due date for furnishing Forms 1095-C and 1095-B to individuals and an extension of good-faith relief from reporting penalties will be necessary for future years. While the federal individual mandate penalty is reduced to $0 in 2019, certain states, including New Jersey, Vermont and Massachusetts, have enacted individual mandates and have their own reporting rules.
[Related Reading: ACA Compliance and Reporting: What’s Happening Now?]
ACA Reporting 1094 and 1095 Resources: Final Forms and Instructions
- Instructions for Forms 1094-C and 1095-C
- Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
- Form 1095-C Employer-Provided Health Insurance Offer and Coverage
- Instructions for Forms 1094-B and 1095-B
- Form 1094-B Transmittal of Health Coverage Information Returns
- Form 1095-B Health Coverage 2019
Jenny Lucey, CEBS
Manager, Reference/Research Services at the International Foundation
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