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Today is the IRS deadline for employers to provide paper filings of forms 1094-C and 1095-C to the IRS for the 2019 tax year as required by the ACA’s Employer Mandate.
As a reminder to employers in conjunction with the Employer Shared Responsibility Payment (ESRP), the ACA’s Employer Mandate requires Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
Every year ALE’s are required to file information returns with the IRS to identify whether they offered health coverage to their full-time employees (and their dependents) and information about the type of coverage offered. Employers must provide this information to the IRS via Forms 1094-C and 1095-C. ALEs must also provide a copy of Form 1095-C to their full-time employees, including to any person employed full-time for one or more months of the reporting year.
Form 1094-C summarizes the ALE’s 1095-C information returns as well as details pertaining to the organization such as EIN, address, point of contact, and certifications of eligibility regarding the health insurance offered for a particular year. Specifically, Form 1094-C includes the following:
● ALE’s address, phone number, employer identification number
● Numbers of full-time and total employees
● Contact person
● How many 1095-C forms are being submitted
● Certifications of Eligibility
Form 1095-C summarizes the information regarding healthcare offered to an ALE’s full-time employees and their dependents. They are provided to the IRS and copies are also provided to each full-time employee. The form includes:
● Healthcare coverage offered to the employee
● Lowest-cost premium available to the employee
● Months of the year when the coverage was available
The IRS is currently issuing penalties to employers that fail to meet this deadline as well as other deadlines under IRC 6721/6722 in Letter 5005-A/Form 886-A. Both types of penalty assessments can be in the millions of dollars, even for smaller ALEs.
Employers should note that employers who have less than 250 returns can take advantage of the paper filing process. All employers with more than 250 returns must use the electronic filing process. For those employers who are allowed to paper file, they should consider the benefits of filing electronically.
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