The IRS recently released new Affordable Care Act (ACA) IRS forms for 2023. The now well-known “Employer Mandate” outlines employer responsibilities for ensuring employees, and their families, have access to affordable healthcare insurance coverage. Also known as the Employer Shared Responsibility Payment (ESRP) is part of the ACA and took effect in 2015. While the new forms do not contain significant change, an update is in order. Here’s what you need to know about ACA compliance changes.
New ACA Forms
Final versions of four forms have been released. These include:
- Form 1094-B, Transmittal of Health Coverage Information Returns.
- Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.
- Form 1095-B, Health Coverage.
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
The “B” forms are used to report on those employees who had MEC (minimal essential coverage) in the tax year and, therefore, who are not responsible for individual shared responsibility payments.
The “C” forms are to be filed by ALEs (applicable large employers) providing information to the IRS about employees who have been offered, and employees who have enrolled in health coverage for the 2023 tax year.
Effective with the 2024 tax filing year, taxpayers with 10 or more aggregate returns, including ACA returns, must file electronically. Paper filers must file forms by February 28, 2024 (even though 2024 is a leap year)—electronic filers must file by April 1, 2024.
While employer responsibilities under this mandate are fairly straightforward, there are some nuances and implications for employers that they must stay continually on top of and compliant with.
Filing requirements are one of these critical components.
ACA Reporting Updates
Each year employers must file official documentation with the IRS indicating their compliance with the mandate. The four key areas of the ACA that impact employers include:
- The designation of Applicable Large Employers (ALEs)—employers that have 50 or more full-time employees and full-time equivalents (FTEs). These employers are required to offer Minimum Essential Coverage (MEC) to at least 95% of these workers and their dependents.
- The Premium Tax Credit (PTC) and health exchanges where taxpayers can find and sign up for affordable healthcare coverage.
- The expansion of Medicaid and Medicare to allow those with income up to 138% of the federal poverty line (FPL) to enroll in Medicaid, if available in their state.
- Individual shared responsibility, requiring all citizens to enroll in health coverage or face the possibility of a tax penalty.
In addition, employers must accurately report the number of full-time employees and FTEs they had during a calendar year. That’s a task that isn’t as simple as it may sound. Tallying accurate employee counts can be complicated for employers with part-time and/or seasonal staff. The Look-Back Measurement Method can help.
Staying in compliance with ACA regulations and reporting requirements not only minimizes penalty risk for employers, but offers benefits for employees as well. Healthcare coverage is a highly valued employee benefit. Ensuring employees understand the benefits they have available to them—and that they take maximum advantage of those benefits is a win-win.
Help With Filing IRS Forms 2023
Smaller employers operating in a single state have ACA filing requirements that can be quite manageable. But the more employees a company has and the more states they operate in, the more complex and burdensome their filing responsibilities can become.
Trusaic’s ACA state filing services can handle all of these reporting obligations, offering:
- Safe, secure, timely, and accurate 1094-C and 1095-C filings with state governments
- Preparation and furnishing of forms 1095-B and 1095-C
- Employee reporting eligibility determination
- Penalty risk review to ensure compliance
Trusaic can provide you with seamless, accurate, and reliable reporting, along with peace of mind. Contact us today to learn more.
To gain invaluable insights on penalty amounts, affordability percentages, filing deadlines, expert tips for responding to penalty notices, and proven strategies for minimizing IRS penalty risk, download the ACA 101 Toolkit.