The IRS has officially released the final forms and instructions for employers to use with 2017 ACA required reporting.
Applicable large employers (ALE) - or those that average at least 50 full-time employees, including full-time equivalent employees, during the prior year - must use the following forms:
Employers that sponsor self-insured health plans* must use the following forms:
*Self-funded employers who also are ALEs may use Forms 1094-C and 1095-C in lieu of Forms 1094-B and 1095-B.
Any employer required to file 250 or more information returns must file them electronically. This requirement applies separately for each type of return and separately to each type of corrected return. All employers – regardless of the number of returns - are strongly encouraged to electronically file. ACA information returns and transmittals are electronically filed through the ACA Information Return system, also known as AIR.
For information on the communication procedures, transmission formats, business rules and validation procedures for returns transmitted electronically through the AIR system, review Publication 5165, Guide for Electronically Filing Affordable Care Act (ACA) Information Returns.
ACA Required Reporting Background: The various forms provided to employees and transmitted to the IRS provide the information necessary to determine if the employer and/or any of its employees are subject to penalties or are eligible for premium tax credits under the ACA. Specifically, the ACA requires employers to provide information that their employees have minimum essential coverage. Without this coverage, employees are subject to a penalty when they file their federal income tax returns.
Further, employees who do not have affordable minimum essential coverage may receive a premium tax credit if they enroll in health coverage though a Health Insurance Marketplace (Exchange). Finally, employers with 50 or more full-time employees are subject to a penalty (shared responsibility payment) if they do not offer their full-time employees minimum essential health coverage that is affordable.
2017 Form Changes: The 2017 forms and instructions are very similar to 2016. Minor changes – meant to simplify or clarify – include the following:
- Removal of references to transition relief options that are no longer available to ALEs.
- Confirmation that the multiemployer interim relief rule remains in place for ALEs that contribute to a multiemployer plan (e.g., union trust).
- Updated references for items that have been adjusted for inflation. For example, the affordability percentage is 9.69 for 2017.
- Additional note in the instructions for Form 1095-C, line 16, stating that "There is no specific code to enter on line 16 to indicate that a full-time employee offered coverage either did not enroll in the coverage or waived the coverage."
- January 31, 2018 – due date to distribute Form 1095-C or Form 1095-B to employees.
- February 28, 2018 – due date to file Form1094-C or Form 1094-B to the IRS if filing on paper, along with Form 1095-C or Form1095-B.
- April 2, 2018 – due date to file Form 1094-C or Form 1094-B to the IRS if filing electronically, along with Form 1095-C or Form 1095-B.
Key Takeaway for MRA Members: While the IRS has issued extensions to due dates in the past, employers have been working with these reporting requirements for several years now so we may not see extensions this time around. Employers should plan on complying with the key deadlines noted above to avoid any penalties due to untimely filing and reporting.
Source: IRS.gov; Lynell Meeth, HR Director – Member Content, MRA – The Management Association