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The new year is here, and with it a laundry list of items to be sure your organization has a handle on, including ACA reporting with the IRS.
Every year, the IRS requires employers to submit important ACA information to the agency and their employees as part of the ACA’s Employer Mandate. Under the ACA’s Employer Mandate, 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) 4980H penalties.
Below are the most important 2021 dates as they apply to ACA reporting for the 2020 tax year.
February 28, 2021
February 28, 2021 is the deadline to paper file forms 1094-C and 1095-C with the IRS for the 2020 tax year. This applies to employers with total form counts (less than 250) who can elect to paper file their ACA information filings with the IRS. Organizations should adhere to proper filing process and document layout. The 1094-C must be the first form in the submission and the documents must be printed in landscape format. Double check that the Company Name, address, EIN, and associated EINs, in addition to all of the other applicable fields on the 1094-C cover page, are accurate.
March 2, 2021 (Previously January 31)
Previously January 31, the IRS extended the deadline to furnish the 1095-C forms to employees for the 2021 tax year to March 2. Make sure that you’re distributing 1095-C forms to all of your ACA full-time employees. Failure to do so could result in a Failure to Furnish penalty under IRC Section 6722. When printing the forms to furnish to your employees, ensure that the forms are printed in landscape format and all necessary fields on the 1095-C are accurate and complete.
March 31, 2021
March 31 is the deadline for electronically filing Forms 1094-C and 1095-C for the 2020 tax year. Employers are encouraged to file electronically as there are a number of benefits, including the additional time.
July 31, 2021
Form 720 (PCORI) for 2020 is due from self-insured plans by July 31, 2021. PCORI was renewed through 2029. Applicable organizations should be mindful of their medical plan start and end dates to ensure they are paying the appropriate PCORI fees accurately and timely. You can learn about the new PCORI fees here.
August 1, 2021
August 1, 2021 is the first of many late filing deadlines for the 2020 tax year. Employers that fail to file their 1094-C and 1095-C forms for 2020 by August 1 could be subject to ACA penalty assessments from the IRS under IRC 6721/6722. After August 1, late filing penalties for not submitting ACA information to the IRS by the filing deadline may result in fines doubling for each return not yet filed with the IRS.
Remembering and meeting these key dates will help your organization satisfy its employer mandate responsibilities. But ACA compliance goes beyond knowing when to file ACA information with the IRS. It takes an ongoing commitment to ensure the accuracy of the data that forms the foundation of successful ACA compliance.
One thing to do is to start tracking employee data for any given tax year in January. Consolidate, aggregate, and validate year-to-date data from HR, Time and Attendance, Payroll, and Health Benefits databases each month. This is an important step in ensuring accurate and complete annual ACA filing with the IRS. Employers should also conduct a monthly audit of their employment classifications for accuracy.
Employers that need assistance in ensuring accurate and complete ACA filing with the IRS should contact us to learn about our ACA CompleteSM service.
