By Christy Abend
This time of year marks the reporting season for Applicable Large
Employers (ALEs) working hard to comply with Affordable Care Act (ACA)
Employer Mandate reporting requirements. Under IRS definitions for
the ACA, if an employer has at least 50 full-time employees, including
full-time equivalent employees, during the prior year, that employer
is considered an ALE for the current calendar year. ALEs are subject
responsibility and employer information reporting provisions.
While the ACA presents a copious amount of ever-changing
obligations and paperwork, the two forms that play a pivotal role in
helping you avoid penalties from the Internal Revenue Service (IRS)
are Forms 1094 and 1095.
While reporting information on IRS Forms 1094 and 1095 are
not the only responsibilities employers have to remain ACA
compliant, they are the end result of the ongoing activities that
employers must manage throughout the year, and used to report
offers of coverage to both employees and the IRS.
Form 1094 is considered the cover sheet for all Forms 1095.
The form aggregates information regarding total form counts on
behalf of a single FEIN, and an employer’s meeting the requirement
to offer coverage to at least 95% of their benefits eligible
employees. This form only needs to be submitted to the IRS.
Form 1095 is the form providing information about offers of
coverage, including who coverage is offered to and for what months,
whether or not coverage was considered affordable, whether or not the
employee enrolled or waived their right to enroll in coverage, and for
any months where there is an absence of an offer, what reason, if any,
the employer had for not offering coverage. This form must be sent to
both employees and to the IRS.
There are different versions of Form 1095, including 1095-A,
1095-B and 1095-C. These designations determine who must file the
forms based on the type of insurance offered.
1095-A This form is completed when insurance comes from
the health insurance marketplace, also known as the exchange.
Reporting enrollment from the exchange is not the responsibility
of the employer, rather the exchange will create and distribute
these forms to enrollees.
This form is used by third-party administrators or insurance
carriers and is provided only to covered individuals. It may also
be required for large employers offering self-funded coverage to
non-employees. Any individual who is not actively
employed but is covered through an employer-sponsored health plan
or an individual coverage Health Reimbursement Arrangement (HRA)
is considered a non-employee. For example, this may include former
employees who terminated employment during a previous year,
non-employee directors, retirees, and board members, etc. If a
non-employee is offered and enrolls in employer-sponsored
self-insured coverage, the coverage sponsor (in this case the
former employer) can report this information on form
This form is filed by ALEs that offer fully insured or self-funded
coverage under the ACA. It’s important to note all full-time
employees must be provided with a 1095-C tax form, even if they do
not enroll in offered coverage, and all employees who enroll in
self-insured coverage must be provided with a 1095-C tax form,
even if they are not full time. Forms 1094 and
1095 must be filed together as the IRS uses both to determine
whether an employer is possibly subject to a penalty under the
employer shared responsibility provisions.
The IRS deadlines are different for paper filing and
electronic filing. For the 2022 tax year, employers able to file on
paper must do so no later than February 28, 2023. For ALEs filing
electronically, the deadline is March 31, 2023. Forms 1095-C must
also be furnished to recipients no later than March 2, 2023.
ALEs who fail to comply with IRS information reporting
requirements can be subject to steep penalties. The
2023 penalty for failing to file an information return is $290 per
return, with a calendar year cap of $3,532,500 (based on an employer’s
gross receipts). This penalty is doubled where the IRS determined
blatant disregard from the employer.
ACA employer reporting requirements grow in complexity and
can change each year. Rely on the subject matter expertise of
Equifax Workforce Solutions and our Affordable Care Act
Contact us any time
with questions about getting help to better manage your Forms 1094 and
1095 and check out our guide, ACA Penalties and What
They Mean for Your Company. Failure to meet ACA guidelines or
properly complete your IRS forms could expose your company to
penalties that increase the longer you remain outside of ACA guidelines.
The information provided is intended as general
guidance and is not intended to convey any tax, benefits, or
legal advice. For information pertaining to your company and
its specific facts and needs, please consult your own tax
advisor or legal counsel. Equifax Workforce Solutions
provides services that can help employers reduce their
compliance risks. Details on our provision of these services
and related support will be contained in your services
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