Employers that are subject to the ACA’s employer mandate (generally, those with 50 or more full-time employees) should be well on their way to completing their 1095-C and 1094-C forms, which are to be sent to employees and the IRS in the coming weeks. Here are some quick tips and reminders before you finalize your forms and put them in the mail (or transmit them electronically to the IRS):
- Remember that the deadline for mailing the 1094-C and copies of all 1095-Cs to the IRS is February 28, 2020. If you transmit them electronically instead of mailing them, the deadline is March 31st. In either event, the deadline for mailing 1095-Cs to employees is March 2nd.
- If you’re using your payroll company or other vendor to complete the forms, make sure you double check them for possible errors before mailing or filing. Keep a particular eye out for the following, which have resulted in a lot of erroneous penalty assessments from the IRS:
- On the 1095-Cs, watch out for blanks on Lines 14 and 16. Line 14 should never be blank. Line 16 should be blank ONLY if the employee was offered coverage that didn’t meet affordability requirements and waived that coverage.
- Make sure you complete Section III of the 1095-C for any months in 2019 during which you offered a self-insured group health plan.
- On the first page of the 1094-C form, you more than likely need to check the box for Line 19. Failure to do so can result in late filing penalties. Check the IRS Instructions if you’re not sure whether to check the box.
- In Part III of the 1094-C, check to see whether “No” is checked for any month under column (a). If it is, this could subject you to substantial penalties for failure to offer coverage to at least 95 percent of your full-time employees for that month. If you believe the box is marked “No” in error, you likely have a problem with your reporting setup and/or employee classifications.
- Also on column (a) of the 1094-C, if you offered coverage to at least 95 percent of your full-time employees for all 12 months, go ahead and check the “Yes” box for each month (lines 24-35) rather than just checking the “All 12 months” box (on Line 23). Checking Yes on Line 23 alone has resulted in erroneous penalty assessments from the IRS.
These are just some of the most common problems we have seen. Feel free to contact me with any questions you may have about these or any other ACA reporting concerns!