Employers: It’s not too late to complete your ACA filings

The final deadline for Affordable Care Act (ACA) reporting was on April 2. Are you an applicable large employer (ALE) that missed this e-filing deadline for ACA Forms 1094-C and 1095-C?

If you’re uncertain about the ACA reporting requirements and deadlines, here’s a quick breakdown:

  • Feb. 28, 2018 – Paper filing deadline for Forms 1094-C and 1095-C.
  • March 2, 2018 – Extended deadline for ALEs to deliver Forms 1095-B or 1095-C to employees.
  • April 2, 2018 (shifted from March 31 as it fell on a Saturday) – E-filing deadline for Forms 1094-C and 1095-C (E-filing is required for employers with 250 or more employees).

Luckily, if you haven’t completed your filings yet, you can still submit to the IRS to avoid increased penalties.

Filing late is better than not filing at all

Penalties for late filings are already steep. For the 2017 tax year, failure to file complete and accurate ACA forms will result in a penalty of $260 per form, with a maximum total penalty of $3,218,500.

Filing within 30 days of the deadline provides some relief by reducing the penalty per form from $260 to $50. If you can’t get your forms submitted by April 30 (30 days after the e-filing deadline of March 31), filing before Aug. 1 results in a decreased penalty of $100 per form. Depending on how many employees are on your payroll, these reduced penalties could mean thousands or even millions of dollars saved.

However, if the IRS is able to determine you intentionally did not submit the required forms, the penalty amount increases to $530 per form with no maximum penalty limitation.

Employer ACA requirements

While the ACA’s individual mandate was repealed as part of the GOP tax bill, the employer mandate is still in place. This means ACA reporting requirements for employers remain, as do the penalties that come with failing to comply.

In fact, ACA compliance is more critical than ever as ALEs are beginning to experience the repercussions of ACA noncompliance. The IRS has begun sending out ACA penalty Letter 226J to ALEs that didn’t offer an affordable health plan that meets minimum essential coverage standards to ACA full-time employees in 2015, and it will likely continue to do so for subsequent reporting years.

Many politicians might believe, and might have promoted in the media, that the individual and employer mandates go hand-in-hand, and the repeal of the individual mandate will weaken employer regulations. But that’s not the case. If you missed the 2017 reporting deadline, penalties will be issued by the IRS. Complete your ACA filings today to avoid the maximum fines.