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The Affordable Care Act (ACA) requires employers to report certain information to the IRS and plan participants each year. The employer deadlines for ACA reporting and form distribution for health care coverage offered in the 2019 calendar year are approaching. The relevant due dates are as follows:

DEADLINE ACTION ITEM
February 28, 2020 Paper Filing Deadline
March 2, 2020 (extended from January 31, 2020) Distribute IRS 1095 Forms to Employees (if vendor does not distribute on your behalf)
March 31, 2020 Electronic Filing Deadline (required if filing 250+ forms)

 

Which employers must file ACA Reporting?

Applicable Large Employers (ALEs) and all self-insured/level-funded employers must file ACA reporting, as outlined below.

  • ALEs: Applicable Large Employers (ALEs), those with 50 or more full time or “full time equivalent” employees in the previous calendar year, must submit reporting. This means that employers who had an average of 50 or more full-time and full-time equivalent employees in 2018, would be an ALE in 2019, and would have to file ACA reporting in 2020.
  • Self-insured employers: All employers who sponsor self-insured or level-funded medical plans must submit reporting. This includes small employers who are not ALEs.

Fully insured non-ALE employers do not have any ACA reporting obligations.

 

What forms are required for ACA Reporting? 

The forms that employers must use to report depend on whether they are an ALE and whether they sponsor fully or self-insured plans (including level funded plans). The form requirements are further outlined below.

Fully Insured Plans Self-Insured Plans
Non-ALE (small employer) Not required to file with the IRS. Forms 1094-B and 1095-B.
ALE Forms 1094-C and 1095-C (Part III will not be completed). Forms 1094-C and 1095-C (with parts I, II, and III completed).

 

What are Forms 1094/5-B and 1094/5-C?

Reporting involves two sets of forms:  the “B-Series” (Forms 1094-B and 1095-B); and the “C-Series” (Forms 1094-C and 1095-C).

  • The B-Series forms are used to report whether individuals have minimum essential coverage.
  • The C-Series forms are used to report information about offers of health coverage to determine whether an ALE owes a shared responsibility payment (penalty) and to determine the eligibility of employees for the premium tax credit.

Each set of forms includes a transmittal form (Form 1094-B or 1094-C), which serves as a cover page and provides aggregate information, and an individualized form (Form 1095-B or 1095-C) for each employee for whom the employer is required to report.

 

How can employers complete their ACA reporting? 

Most employers use an ACA Reporting or payroll vendor to assist with their reporting obligations. Employers should check in with their vendor to ensure their reporting is accurately and timely filed.

 

What are the distribution requirements? 

Employers who file ACA reporting must distribute Forms 1095-B/C to employees who they offered coverage to in 2019. Note that many ACA Reporting vendors will assist employers with the distribution requirement.  The forms must be distributed to employees by March 2, 2020 (the prior January 31, 2020 deadline was extended by the IRS).

  • ALEs who file ACA reporting must distribute 1095-C forms to employees whom they offered coverage to in 2019.
  • Non-ALEs who are self-insured must either distribute 1095-B forms to employees or post a specific notice of the availability of 1095-B forms on their website. For more on how to fulfill the distribution requirement via electronic posting, see our article.

 

Employer Action Items:

  • Employers should determine whether they are subject to 2019 ACA reporting.
  • Employers should work with their ACA reporting vendor to ensure they submit accurate reporting by February 28, 2020 (paper) or March 31, 2020 (e-filing).
  • Employers should distribute 1095 Forms to participants by March 2, 2020 (some ACA reporting vendors will help employers with this requirement).

 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.