By The ACA Team
And just like that, our seventh filing year has come to an end. 2021 was a bit better to all of us than 2020, and we hope the same for you. Just like in the past, the due date for furnishing Form 1095-C to employees was extended from January 31, 2022, to March 2, 2022. Forms were then due to be filed by March 31, 2022.
Below are some helpful lessons we learned over the last year as well as years past. We’re sharing them with you in hopes that we can all be prepared for the coming year.
One
Automatic extension. Once again, the IRS had provided an additional 30-day automatic extension for the distribution of the 1095-Cs to employees for reporting year 2021 from January 31, 2022, to March 2, 2022. Additionally, the IRS is also proposing a permanent extension be put into place for all future filing years. If approved, this automatic extension would extend the due date for distribution of 1095-C forms to March 2. Even with this extension, the electronic filing due date will remain March 31.
Be aware that the IRS has also ended the “Good Faith” provision for reporting year 2021 and beyond. It is now more important than ever to ensure all 1095-Cs are filed accurately.
Two
Rate changes. Let us know if rates change at any time during the year! This affects line 15 on Form 1095. Remember, the IRS requires you to report the lowest single plan cost available to an employee or group. Therefore, do not be alarmed if John Doe is enrolled in the Gold Family plan and his 1095-C form line 15 shows the monthly cost for the Bronze plan. However, if there are fewer – or more – plans available for an employee or line 15 appears wrong, please make sure to notify us as soon as possible. We can always correct it and re-transmit the affected forms to the IRS.
Three
Full-time (FT) designation changes. We have noticed that clients tend to remove an offer of coverage if an employee decides that they no longer want to work FT position hours and move into a part-time (PT) position. When a situation like that occurs, talk to us so that we can determine if said employee is still considered ACA FT. In some cases, employees have worked enough hours to be ACA FT for the full reporting year and therefore should be offered coverage no matter their working hours.
Four
ICHRA. As we all know, 2020 was the first year when the IRS required reporting for ICHRA (Individual Coverage HRA). The reporting is confusing and has lots of rules. We continue offering information to our clients so that they can navigate ICHRA with ease. Feel free to review our webinar at your leisure. If your organization is thinking of introducing ICHRA, let us know as soon as possible.
Five
State filing. State filing continues to be required by the states of CA, DC, NJ, and RI. We continue monitoring other states should they make the decision to require additional filings. Nothing has changed in our process. We continue helping our self-insured clients with their state filing obligations and have extended help to some of our fully insured clients as their coverage providers have neglected to make the necessary filings. If you are a fully insured organization and have employees in the states we mention above, we urge you to check with your coverage provider to see if your state filing was completed for 2019, 2020, and/or 2021
Six
226J. The 226J is the initial notice issued by the IRS to an employer to let them know about potential liability for an Employer Shared Responsibility Payment (ESRP). This notice is triggered by an employer offering an employee coverage that was unaffordable based on their rate of pay. The employee then waived that coverage and applied for subsidized coverage through the Exchange. So now the government wants their money back! Contact us as soon as possible so that we can review the information on Forms 1094-C and 1095-C and help you with the appropriate response to the IRS.
Seven
Ask questions. If you are new to ACA or if you forgot why we ask for certain information or why we provide certain reports, please reach out. We are here to answer your questions! Remember that we don’t have access to your internal systems, so we rely on the data you provide to us. If we get out in front of issues early on, we will eliminate frustration and extra work for you during the busy filing season. If your team has a new person who is not familiar with ACA or if you would like a refresher, visit our website to view an overview presentation and to check out other services we offer.
Thank you again for your diligence and commitment to compliance. We look forward to another great year!