The ACA electronic filing deadline for the 2023 tax year is Monday, April 1, 2024. Are you prepared to file all necessary documents on time?
It’s an important deadline for organizations that must comply with the ACA’s Employer Mandate, which requires Applicable Large Employers (ALEs) to offer affordable Minimum Essential Coverage that meets Minimum Value to at least 95% of their full-time employees and their dependents.
Failing to meet the deadline can result in significant penalty assessments from the IRS.
The Purpose of ACA Filings
For the IRS to identify which organizations are complying with the ACA’s Employer Mandate, the tax agency needs record of the healthcare details ALEs offer each year.
So, how does the agency go about collecting this information? Through the annual 1094-C and 1095-C forms that employers must file each year.
These ACA filing submissions provide the IRS with insight regarding the health plan information organizations offer, including which employees received coverage, how much it cost them, and if they enrolled.
The IRS analyzes an organization’s ACA filings against premium tax credit (PTC) information provided by state and federal health exchanges. It’s through this process that the tax agency identifies and assesses ACA non-compliance penalties via Letter 226J.
And it’s for this reason that the information detailed in the Forms 1094-C and 1095-C submission must be accurate, as failing to report correct information can result in significant ACA penalty assessments.
Consequences for Failing to File on Time
Now that we’re in the 10th year of ACA reporting, the stakes for non-compliance are high — and the IRS leniency is waning.
There are two penalties the tax agency may issue to an employer that fails to meet the reporting deadline: Letter 972C and Letter 5005-A.
- Letter 972CG is the late penalty issued to employers that submit their Forms 1094-C and 1095-C to the tax agency and/or provide 1095-Cs to their employees for a specific reporting year after the mandated deadline
- Letter 5005-A is a late penalty issued to employers who have not filed their Forms 1094-C and 1095-C but whom the IRS thinks is an ALE based on their W-2 filing.
The primary difference between these two penalties is that Letter 972CG is issued for a late submission, whereas Letter 5005-A is issued when an employer fails to file.
For the 2023 tax year, the penalty amounts for failing to file and furnish timely 1095-Cs can range as high as $580 per form.
Which Organizations Need to File?
ALEs, or those organizations with 50 or more full-time and full-time equivalent employees must meet the ACA electronic filing deadline each year.
This year, ALEs could paper file their ACA information, however, the threshold for allowable 1095-C submissions was reduced to 10, which eliminates the vast majority of ALEs required to submit their ACA information.
Requests for Filing Extensions
Organizations that believe they will not meet the ACA electronic filing deadline can request an extension with the IRS via IRS Form 8809.
Officially titled “Application for Extension of Time to File Information Returns,” IRS Form 8809 may result in a 30-day extension for filing ACA Forms 1094-C and 1095-C.
Employers should note Form 8809 applications are subject to review and not guaranteed. Be prepared to present a case as to why your organization needs more time to file. The agency is unlikely to grant additional time without good cause as it issued a permanent 30-day extension to the original filing deadline in 2022.
State ACA Requirements
ALEs have more to contend with than just the ACA electronic filing deadline this April. In fact, April 1 is also the deadline for many additional state-level ACA reporting requirements, including California, New Jersey, and Rhode Island.
Organizations that have just one employee living in these states will need to file their 2023 ACA 1094-C and 1095-C forms to the relevant state governments. With remote and hybrid work at an all time high, employers will likely need to comply with the additional state ACA reporting requirements.
Additional penalty assessments can be incurred for failing to meet these state-mandated deadlines as well.
Ensure ACA Reporting Compliance
ACA reporting continues to evolve and the IRS is becoming less understanding when it comes to filing errors. To alleviate the burden of filing accurately, timely ACA information, and to ensure 100% compliance, consider engaging with a solution provider with a track record of success.
Trusaic’s ACA Complete solution handles every component of ACA for you. From tracking enrollment information to documenting plan details, and year-end filling. We’ve helped our clients prevent over $1 billion in ACA penalty assessments since reporting was first required in 2015.
