Topics: ACA Compliance
December 9, 2016 /
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Topics: ACA Compliance
HR personnel who have been struggling to sift through IRS guidelines on ACA reporting have been given extra time to prepare the necessary reporting forms for employees. The government has temporarily adjusted reporting guidelines under Code 6055 and 6056. After they determined that significant numbers of employers and insurance providers were having difficulty "gathering and interpreting" the information needed to provide Forms 1095-B and 1095-C to employees, the IRS and the Treasury Department have granted them some leeway.[Why It's Time To Dump Your Payroll Provider]
The ACA's employer mandate is required for applicable large employers with 50 or more full-time employees (or equivalents). Large employers must adhere to tracking and reporting requirements.
Small businesses (those with fewer than 50 employees) are still subject to some of the ACA reporting requirements. For example, entities with a self-insured health plan are required to submit Forms 1095-B and 1094-B. They also have to provide workers with a copy of Form 1095-B. For small businesses that are members of a controlled or affiliated service group that collectively has at least 50 employees, completion of Forms 1095-C and 1094-C is required.
HR teams should be aware that employers will be penalized if they do not submit required paperwork by the appropriate deadlines. The IRS states in Notice 2016-70 that it will apply a "reasonable cause analysis" to determine penalty amounts for delinquent filers. The IRS will consider factors such as whether employers made reasonable efforts to prepare for filing by attempting to submit information to an agent or test their own ability to gather and submit required data. The IRS will also evaluate whether employers are taking reasonable steps to comply with 2017 filing requirements.
The IRS will continue its "good faith compliance" standard for the second year of ACA reporting (2016). According to that provision, inaccurate or incomplete information on reporting forms won't result in a penalty, provided the forms were filed on time and the employer can demonstrate that they were completed in good faith.
While many are hopeful that President-elect Donald Trump will repeal the ACA upon taking office, the law currently remains in place. Employers and HR departments are advised to closely monitor their processes, observe the ACA distribution deadline, and submit required forms on time.
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