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IRS Releases Final Forms and Instructions for 2017 ACA Reporting

Posted by Vita Companies on October 10, 2017

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Who does this apply to?
This applies to all Applicable Large Employers (company that has an average of at least 50 full-time employees or "full-time equivalents") offering company-sponsored health insurance, insurers or sponsors of self-funded health plans.

What action must I take? 
Reporting will be due early in 2018, based on coverage in 2017. Official deadlines are noted in the "When, Which Employers" section.

Background
Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance while applicable large employers (ALEs) are required to offer health benefits to their full-time employees.

Reporting is required by employers with 50 or more full-time (or full-time equivalent) employees, insurers, or sponsors of self-funded health plans, on health coverage that is offered in order for the Internal Revenue Service (IRS) to verify that:

1. Individuals have the required minimum essential coverage,
2. Individuals who request premium tax credits are entitled to them, and
3. ALEs are meeting their shared responsibility (play or pay) obligations.


2017 Forms and Instructions

Instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released, as were the forms for 1094-B, 1095-B, 1094-C, and 1095-C. There are no substantive changes in the forms or instructions between 2016 and 2017, or between the draft and final instructions, beyond the further removal of now-expired forms of transition relief.

In past years, the IRS provided relief to employers who make a good faith effort to comply with the information reporting requirements and determined that they will not be subject to penalties for failure to correctly or completely file. This did not apply to employers that fail to timely file or furnish a statement. For 2017, the IRS has unofficially indicated that the “good faith compliance efforts” relating to reporting requirements will not be extended. Employers should be ready to fully meet the reporting requirements in early 2018 with a high degree of accuracy. There is however relief for de minimis errors on Line 15 of the 1095-C.

The IRS also confirmed there is no code for Form 1095-C, Line 16 to indicate an individual waived an offer of coverage. The IRS also kept the “plan start month” box as an optional item for 2017 reporting.
Employers must remember to provide all printed forms in landscape, not portrait.

When? Which Employers? 
Reporting will be due early in 2018, based on coverage in 2017.

For calendar year 2017, Forms 1094-C, 1095-C, 1094-B, and 1095-B must be filed by February 28, 2018, or April 2, 2018, if filing electronically. Statements to employees must be furnished by January 31, 2018. In late 2016, a filing deadline was provided for forms due in early 2017, however it is unknown if that extension will be provided for forms due in early 2018. Until employers are told otherwise, they should plan on meeting the current deadlines.

All reporting will be for the 2017 calendar year, even for non-calendar year plans. The reporting requirements are in Sections 6055 and 6056 of the ACA.

The major reporting requirements are:

  Fully Insured
< 50 FTEs
Fully Insured
50+ FTEs
Self-Funded
< 50 FTEs
Self-Funded
50+ FTEs
Forms to employee 1095-B 1095-B / 1095-C
(Parts I and II Only)
1095-B 1095-C (all Parts)
Filed by Insurer Insurer / Employer Plan Sponsor 
(generally the
employer)
Plan Sponsor 
(generally the
employer)
Forms to IRS 1094-B 1094-B (with copies of
all 1095-Bs) / 
1094-C (with copies of
all 1095-Cs)
1094-B (with
copies of all
1095-Bs)
1094-C (with
copies of all 
1095-Cs)
Filed by Insurer Insurer / Employer Plan Sponsor Plan Sponsor


Penalties for Failure to File

Reporting will be due early in 2018, based on coverage in 2017.

  • The penalty for failure to file a correct information return is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,218,500.
  • The penalty for failure to provide a correct payee statement is $260 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,218,500.

Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to file the returns and furnish the required statements.

COMMENTS:

Topics: Affordable Care Act, ACA, IRS, employee benefits, Employers

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