ACA Employer Coverage Reporting Survives

Arthur Tacchino has an urgent message for financial professionals who work with business owners:The Affordable Care Act employer coverage reporting rules are still out there.

Donald Trump may be the president of the United States, and the Internal Revenue Service (IRS) may have agreed to go easy on employers that have problems with filling out their ACA coverage reporting forms the way the IRS would like.

But the ACA "employer shared responsibility provisions" continue to require large employers to file notices describing the coverage they have purchased, or provided through self-insured health plans, for each employee. Those are the 1095 forms.

(Related: The ACA Is Still a Thing: Idea File)

Each large employer is also supposed to use a 1094 "transmittal" form, or cover sheet form, to show the IRS how many 1095 forms it has submitted.

The coverage reporting filing deadline rules are still in effect. The IRS has the authority under federal laws and regulations to impose large fines on nonfilers.

The IRS warned last spring that it was going to look at how many W-2 forms each employer had filed to locate employers that were probably big enough to have to send in ACA coverage reporting forms — and hadn't.

The IRS said it was going to send request-for-information letters to the employers identified by the W-2 v. ACA form gap analysis. It's not clear how many letters the IRS actually sent out.

Even general guesstimates about the number of employers that are ACA coverage reporting form nonfilers are difficult to find.

Under the IRS, an "applicable large employer" is one with just 50 full-time employees or full-time equivalents. The United States had about 240,000 employers with 50 or more employees in 2016, and about 1.9 million separate establishments, according to the U.S. Census Bureau.

The Treasury Inspector General for Tax Administration reported in March 2018 that 318,296 employers had filed 1094-C ACA coverage reporting cover sheet forms for the 2015 tax year, as of June 2017.

Tacchino's Advice

Tacchino, the chief innovation officer at SyncStream Solutions LLC, a health insurance reporting support firm based in Metairie, Louisiana, said in an email interview that financial professionals who work with owners of midsize or large firms should encourage employer clients to talk to benefits compliance advisors about the ACA reporting requirements.

One important goal for employer clients who do know about the reporting requirements, and are trying to comply, is to keep up with collecting the required data, Tacchino said.

"The process of filling out and filing 1095-C forms is much easier if you maintain employee data throughout the year, rather than waiting to review at the end of the year and potentially finding problems that will complicate the process," Tacchino said.

Another important step is to notice which eligible employees who have shifted between different employment status categories during the year, Tacchino said.

"Sometimes employers are not diligent with their tracking and, as a result, offers of coverage may not be extended to employees as mandated," he said.

If employers offer coverage to any employees that they might have missed, they might be able to use that to persuade the IRS to reduce any penalties that might be owed due to a lapse in compliance, Tacchino said.

A collection of ACA employer coverage reporting guides is available here.

— Read New ACA Employer Requirements Continue to Roll In, on ThinkAdvisor.

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