Employers preparing for a smooth 2021 filing season should keep in mind the important ACA deadlines to avoid IRS penalties.
Every year, Applicable Large Employers (ALES) must file and furnish their ACA information to the IRS as required by the ACA’s Employer Mandate.
Under the ACA’s Employer Mandate, ALEs, or employers with 50 or more full-time employees and full-time equivalent employees must:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.
As you prepare for ACA filings, be sure to remember these key 2022 ACA deadlines to minimize risk of receiving IRS penalties.
February 28, 2022: Employers with 250 or less 1095-C returns can paper file their ACA information. The paper filing deadline for the 2021 tax year is February 28, 2022. Employers that paper file should be aware of new IRS proposed regulations that cut down the size eligibility for paper filing. By the 2023 tax year, employers will only be able to paper file their ACA information if they have 10 or fewer 1095-C returns.
March 2, 2022: This is the new annual furnishing deadline, thanks to a new IRS rule that provides employers with an automatic 30-day extension for furnishing the required 1095-C formsto their ACA full-time employees. Previously January 31, the automatic extension applies to the 2021 tax year and all reporting years thereafter.
March 31, 2022: The ACA deadline to file the 1094-C and 1095-C information with the IRS electronically. Employers who opt to e-file experience a number of benefits, including a later deadline for filing with the tax agency.
July 31, 2022: This is the deadline for submitting the annual PCORI fees. Since the 31st falls on a Sunday in 2022, the IRS will likely extend the deadline to Monday, August 1, as it has done previously. Using Form 720, self-funded employers and health insurers must make payments to the Patient-Centered Outcomes Research Institute (PCORI). PCORI fees were set to expire in 2020 but were extended through 2029 as part of the Further Consolidated Appropriations Act.
Employers that miss the aforementioned deadlines can be subject to IRS penalties under IRC 6721/6722. The tax agency is currently issuing late ACA penalties via Letter 972CG and failure to file or flourish penalties via Letter 5005-A. Keep your eyes peeled for these notices as the penalty amounts can range into millions of dollars — we know because we’ve helped soon-there-after- clients eliminate them.
If you need assistance meeting the ACA deadlines mentioned above, contact us to learn about our ACA compliance services. We’ve helped thousands of clients, large and small, meet the ACA deadlines, all while reducing their penalty risk at the same.
For information on how to accurately file your ACA information, read the all-new Employer’s Guide to Coding ACA Form 1095-C below.
