The deadline for distributing the ACAS 1095-C forms to full-time employees is today, March 2. Did you make it?
This deadline applies to Applicable Large Employers (ALEs), or employers with 50 or more full-time employees and full-time equivalent employees. The original deadline was January 31, 2022, but thanks to new regulations that created an automatic 30-day extension for furnishing, employers will have until March 2 or thereabouts each year.
Employers that offer self-funded health insurance must also furnish the 1095-B form to their employees by today, in addition to Form 1095-C.
Additionally, employers with operations in New Jersey and Washington D.C. must furnish 1095-C forms to ACA full-time employees as part of the state ACA reporting requirements.
Failing to meet today’s deadline could result in IRS penalty assessments under sections IRC 6721/6722 via Letter 972CG and Letter 5005-A. These penalty notices, while they may appear similar, are quite different.
Letter 5005-A is issued to employers that simply ignored their responsibilities to file their 1094-C and 1095-C forms or furnish their 1095-C forms for a particular reporting year. These employers are identified by the IRS for having failed to complete their furnishing and reporting obligations.
Letter 972CG on the other hand is a late penalty notice for completing the filing and furnishing requirements after the reporting deadlines.
For the 1095-C forms due this year, employers with average gross receipts of more than $5 million in the last three years can face a range of penalties under IRC Section 6722 for failing to furnish 1095-C forms to full-time workers by today’s deadline:
- Distributing forms no later than 30 days of the deadline could result in a $50 penalty per return, with an annual maximum of $571,000.
- By distributing forms 31 days late and before August 1, the amount per return increases to $110, not to exceed an annual maximum of $1,713,000.
- Distributing forms after August 1 results in a penalty of $280 per return, not to exceed an annual maximum of $3,426,000.
- For intentional disregard, meaning an employer willfully ignored the deadline, the penalty more than doubles after August 1 to $570 per return, and there is no annual maximum limit.
The per return penalty is the same for employers with average gross receipts of $5 million or less in the last three years. However, the annual maximums are lower.
In addition to IRS penalties under IRC Sections 6721/6722 for failing to file and furnish the annual ACA information to full-time employees, the agency is also issuing penalties to employers identified as having failed to comply with the ACA’s Employer Mandate for the 2019 tax year via Letter 226J, though previous years are fair game as well.
Under the ACA’s Employer Mandate, ALEs 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.
If you didn’t make the furnishing deadline today, don’t panic – Trusaic can help. We’ve helped our clients prevent over $1 billion in ACA penalty assessments and can help you resolve any compliance issues. Contact us today to learn about your options.
If you did make the deadline, be sure to double-check your filings before the upcoming electronic filing deadline later this month.
Download the Employer’s Guide to Coding the 1095-C Form for real-world examples of how to accurately document health coverage offerings.
If your business needs assistance meeting their ACA filing deadlines this year, contact us to learn about ACA Complete. Our all-in-one service can keep track of your workforce’s employment periods, help establish affordability and file and furnish Forms 1094-C and 1095-C annually.