Upon signing the tax overhaul bill in late December, President Trump declared that the ACA was “essentially” repealed, thanks to the elimination of the individual mandate. Under the new law, this mandate, which penalizes Americans who don’t carry minimum health coverage, will be eliminated starting in 2019.
The rest of the ACA, including employer reporting of health coverage to the IRS, remains untouched. This means covered employers still must complete their ACA filings for the 2017 tax year or face potential penalties. To be clear: ACA is still the law, and employers must comply with the upcoming reporting requirements.
IRS Plans to Fully Enforce the ACA
As discussed in a previous article, sophisticated systems are now in place for the IRS to enforce the employer “shared responsibility” mandate and annual reporting requirements. In fact, enforcement could bring in more than $200 billion in penalties in the next several years, according to the Congressional Budget Office — not a small incentive for the IRS to follow through on enforcement.
In addition, the IRS recently announced that it would reject tax returns from individual taxpayers if they don’t include the required details about their employer-provided health care coverage. As a result, affected employers must file 1095-C reporting forms and supply copies to employees — or deal with the costly consequences. Employers who ignore or delay this mandatory reporting could experience pushback from employees whose refunds are delayed, as well as significant penalties from the IRS.
ALEs Should Be Ready to Report
The ACA reporting requirements have the biggest impact on applicable large employers (ALEs) — businesses with 50 or more full-time or full-time-equivalent employees. (Not sure? Get the free tip sheet, Are You an ALE?, here.) To stay on schedule and avoid IRS penalties, these businesses must meet the following tax-filing deadlines:
- February 28, 2018 — file paper forms with the IRS (250 forms max)
- March 2, 2018 — provide employee copies
- April 2, 2018 — e-filing forms with the IRS (mandatory for 250+ forms)
With these deadlines right around the corner, it’s critical to act now.
Expert ACA Assistance from ComplyRight
For detailed guidance on how to comply with the ACA this 2017 tax-filing season, visit our ACA information center at ComplyRight.com/aca.
You also can ease your ACA reporting burden by working with an online e-filing service such as efile4biz. With this affordable and efficient service, you just upload your ACA form data (or complete the forms online) and the service provider does the rest — including e-filing the 1095 forms with the IRS and, optionally, printing and mailing the 1095 forms to employees.