ACA Reporting and COVID-19 Considerations

December 16, 2020
Publication
Inside HR
Affordable Care Act (ACA)
Read time: 3 mins

COVID-19 has brought a year of never-ending changes and has made it necessary for HR professionals to track information like never before. In addition to tracking leaves of absence, the number of active cases in the workplace, or the number of vacation days each person is carrying over to next year, you should also be aware of situations that may affect Affordable Care Act (ACA)1095 reporting. Many companies needed to make changes to their workforce numbers or schedules and that could affect how the information is reported for 2020.

If you are one of the lucky ones who doesn’t need to change much, if anything, about how your business operated this past year, you probably won’t need to make adjustments to your reporting. If you needed to adjust schedules or workforce, though, there are some things to consider when filing for 2020.

What is changing?

Not much is changing on the form itself. There is a new requirement to include your plan’s start month, but that is the only notable change. Prior to 2020, this field was optional.

The MEC (Minimum Essential Coverage) amount also increased to 9.78% for 2020. This comes into play when determining the affordability of your plan for those who are offered coverage.

What do I need to know about reporting for 2020?

There are several situations that may cause your reporting to be different than in past years. If your company needed to reduce its workforce for any reason—furloughs, lay-offs, reduced schedules, or other leaves of absence—your plan’s affordability for those individuals could be impacted. On the other hand, if you are an employer who found it necessary to increase hours due to business demand or to cover absences, you may find that some people who weren’t eligible for benefits before became eligible as a result. 

Paid leaves should not impact your reporting and are still counted as time worked for reporting purposes. However, if you provided unpaid leave and your employees were able to continue health insurance coverage under the company plan, you may need to be mindful of affordability and whether or not they exceed the 9.78% threshold for your measurement period (monthly or one year look-back).

What will stay the same?

Despite all the things to consider, there are some areas where you catch a break and won’t need to change anything.

  • Offers of affordable coverage still need to be made to at least 95% of your full-time or full-time equivalent employees.
  • The deadline for furnishing 1095-C forms to employees is March 2, 2021, while the deadline for electronically transmitting the files to the IRS is March 31, 2021. The deadline was pushed out in 2019 and those dates will remain the same for 2020 reporting. Filing deadlines for the 1094-B and 1094-C forms remain March 31 as well. An extension for all reporting may be requested using Form 8809.
  • If you are providing digital copies of the 1095-C rather than paper copies, you must post a notice on your website telling employees where they can request a printed copy.
  • Reporting will still be done using a one-year look back or monthly method.

Back by popular demand, MRA will be offering a webinar on Affordable Care Act Reporting on January 6, 2021, with Renee Kuhs, Senior Compliance Attorney at M3 Insurance, who will help navigate through the different scenarios that may affect your reporting.