I Missed My ACA Deadline, Now What?

Furnish and file your 1094/1095 forms with the IRS as soon as possible, and consult with an HR expert to assist you with ACA reporting after the deadline.

Last Updated on May 2, 2022 by G. T. HR

What Employers Can Do If They Missed The 2022 ACA Reporting Deadline

Every year Applicable Large Employers (ALEs) must file and furnish their ACA information to the IRS and their employees, respectively. Failing to do so can result in significant IRS penalty assessments.

In November of 2021, the Internal Revenue Service (IRS) published proposed regulations that explain, among other things, an automatic extension of the deadline for furnishing IRS Forms 1095-C to employees. IRS Forms 1095-C are the annual information returns required by the Affordable Care Act (ACA) for reporting offers of minimum essential health coverage to employees. Specifically, the proposed regulations provide for a 30-day extension of this deadline from January 31 to March 2 (March 3 in a leap year)

Failing to meet these deadlines can result in penalties under IRC 6721/6722, which the IRS is issuing through Letter 972CG. If you receive one of these notices, you only have 45 days from the issue date to respond to the penalty notice. 

Common Issues for Employers When Filing 1094-C and 1095C

Accurate Completion

From the start, the accurate completion of Forms 1094-C and 1095-C has challenged employers. Not only were employers contending with accurate and complete reporting of basic information, such as names, addresses, and TINs, they struggled with the complexity of the fact-sensitive codes required by the ACA under Part II (Employer Offer of Coverage) of Form 1095-C. This is especially true when it comes to completing the forms for employees who change employment status during the year (full-time to part-time or vice versa, terminate and re-hire, COBRA continuants, etc.), which can require different codes to be reported under Part II of Form 1095-C.

Form Mistakes

Mistakes on Forms 1094-C and 1095-C— in particular, mistakes in the coding of offers of coverage and the relief available to employers—often lead to the assessment of proposed penalties under the ACA’s Employer Shared Responsibility Payment (ESRP) provisions of Section 4980H of the Code, resulting in the employer’s receipt of the dreaded IRS Letter 226-J.

Reporting incorrect codes, or simply checking the wrong box on Forms 1094-C and 1095-C, can make it appear as though the employer is not offering ACA-required minimum essential coverage to at least 95% of its full-time employees, not providing affordable coverage, or is otherwise non-ACA-compliant. 

What to Do if You Missed the Deadline

If you did not file your 1094/1095 forms with the IRS or furnish the 1095 forms to your employees, it is important to file and furnish them as soon as possible. The penalty for late filing and furnishing increases the longer they are not filed.

ACA Returns Filed / FurnishedNot more than 30 days late31 days late until August 1stAfter August 1
Due 1/1/2022 through 12/31/2022$50 per form$110 per form$280 per form

There are two steps with the ACA forms:

  1. File them with the IRS
  2. Provide them to the employee

The penalty stated for each form is for each of these steps. Therefore, if you have 1095 forms that are not filed with the IRS nor furnished to the employee the penalty would be $560 for each form after August 1st.
It is important that employers file the forms as soon as possible, even if they are late. For example, an employer that files and furnishes 100 forms less than 30 days late would have a penalty of $10,000. If the employer waits until after August 1st, the penalty would be $56,000.

Don’t Miss ACA Deadlines With ACACompli from MyHRConcierge

 If you do not already have one, get with a provider such as MyHRConcierge that can help you create the forms, distribute them to the employees, and file them with the IRS. By doing so as soon as possible, you could save yourself significant penalties.

Source: https://www.verrill-law.com/benefits-law-update/elimination-of-good-faith-relief-for-aca-reporting/