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With the Likelihood of ACA Repeal Uncertain, IRS Reporting is Still a “Go”

Published on 2/28/2017 12:00:00 AM
1095-c Information reporting under the Employer Shared Responsibility Rule remains a requirement for qualifying businesses under the ACA.

“Repeal and replace Obamacare” was a fervent cry of President Trump while on the campaign trail. More recently, however, the President has acknowledged that the process of overhauling the comprehensive health care law is complicated
and might take longer than anticipated.

Now, lawmakers are split on whether to replace or merely repair the ACA,
with Trump and House Speaker Paul Ryan both predicting a 2018 timeframe for making any measurable changes.

What Does this Mean for ACA Tax Reporting?

With no repeal in the immediate future, the takeaway is this:
Tax information reporting under the Employer Shared Responsibility Rule remains a requirement this tax season … and possibly beyond.

Currently, ACA regulations require certain employers to report healthcare coverage information to employees and the IRS using forms 1095-B and 1095-C (and transmittal forms 1094-B and 1094-C). Specifically, this affects employers with 50 or more full-time (or full-time equivalent) employees, all self-insured employers (regardless of size) and health insurance companies. This reporting requirement is in addition to reporting healthcare costs on W-2 forms.

For now, you must not only file the required ACA reporting forms this tax season, but also continue to track employee health care coverage in the coming year.

Stay in Compliance This Tax Season

Are you ready for this year’s IRS reporting? In 2016, businesses got an extra two months to distribute forms to employees, and up to three more months to e-file with the IRS. The extensions aren’t as generous for 2017. The timeline for reporting is:

March 2, 2017—Provide required forms to employees
(vs. March 31 last year)
March 31, 2017—Electronically file data with the IRS
(vs. June 30 last year)

Due to the ongoing reporting requirements and shorter deadlines, you need to be extra-diligent this tax season. Cutting corners with mandatory reporting could lead to costly penalties. The IRS may allow for certain errors if you made a “good-faith effort” to complete 1095 ACA forms accurately, but penalties can be steep if you miss the deadlines: $260 a filing, up to $3 million. The financial hit is even higher for outright failure to distribute employee statements or file with the IRS: $530
a filing, with no maximum.

Something else to keep in mind is that, even if the ACA is repealed down the road, you can’t count on the reporting requirements being eliminated. Any new plan still could carry a tax-related component, such as tax subsidies or tax breaks, that would require some level of IRS reporting. In fact, new healthcare legislation could increase the burden in the short run if tracking and reporting requirements change significantly.

Choose E-File to Meet the March 2 Deadline

Electronically filing your forms is the fastest, easiest way to meet the ACA reporting deadlines. (a ComplyRight brand) is a leading, IRS-authorized e-file provider that makes online processing of ACA forms more convenient and economical
than paper forms and installed software. Just enter or upload your employee information online, and they will print and mail copies to your employees
and e-file your forms directly with the IRS, accurately and affordably.

Jaime Lizotte
Presented by: Jaime Lizotte,
HR Solutions Manager
Hiring, recordkeeping, time and attendance tracking, employee discipline, filing 1099 and W2s ... all of these tasks create overhead expenses and detract from revenue-generating activities.