Passed in 2010, the Affordable Care Act has managed to dodge several repeal attempts and is still an incredibly important regulation for employers to monitor. Each year presents new challenges for employers and annual legislation changes can be difficult to interpret and even harder to track.
And that’s why we’re here.
We’ve got the scoop on all of the important deadlines and changes that you need to know for 2020 ACA reporting.
This quick overview will inform you of the important ACA-related dates and deadlines for the upcoming year, define changes for 2020, explore penalties for non-compliance and introduce several solutions to make ACA easy.
Let’s get started!
ACA 2020 Dates & Deadlines
February 28, 2020: Paper filing with IRS*
March 2, 2020: 1095-C forms postmarked to employees
March 31, 2020: eFiling with IRS
January 31, 2020: 1095-C forms delivered to employees
*Paper filing only permitted for filing under 250 forms.
Not much has changed in the past several years from an employer perspective, aside from small adjustments to account for changes in inflation. Despite this, ACA reporting is now more complicated than ever. With new state-level reporting requirements, there are even more requirements and deadlines to keep track of (and there will be even more starting in 2020).
Reminder: Employers are still required to offer health care coverage to employees in 2020.
One specific change that will impact employers in 2020* is the percentage of an employee’s income that an employee’s health care contribution must not exceed. Previously, this number was 9.86%, meaning the cost of employer-provided health care must not exceed 9.86% of an employee’s income. In 2020, that amount will be decreased slightly to 9.78%. This amount will determine whether your health care is considered “affordable”, an important requirement for ACA compliance.
*Note: While this change will go into effect in 2020, it will not impact employer reporting until submissions in 2021.
ACA 2020 Required Forms
There are several specific forms that need to be completed and submit to meet ACA compliance. Keep in mind that solutions exist to expedite this process – more on that later.
This form provides information to the IRS about the employer/FEIN the associated 1095-C forms are filed under. Think of the 1094-C as a cover sheet for the 1095-C forms that accompany it to the IRS.
Important 1094-C form details to note include:
• Number of full-time and total number of employees by month
• Whether minimum essential coverage was offered to at least 95% of your applicable employees by month
• Whether a 4980H safe harbor was used each month
• IRS must receive this form by February 28, 2020, if you file manually, or March 31, 2020, if you file electronically
This form serves as a ‘proof of insurance’ sheet that must be provided to each employee that is eligible to receive health insurance under the ACA definition of an eligible employee and any individual that enrolled in a self-funded medical plan. This form provides information about the coverage offered to employees, the lowest-cost premium available to employees and the months of the year when the coverage was available. This form is also reported to the IRS.
Important 1095-C form details to note include:
- The employee’s share of the lowest cost monthly premium
- Whether a 4980H safe harbor was used each month
- Any self-insured covered individuals
- Employees must receive their copy by January 31, 2020
ACA 2020 Penalties
Failure to comply with ACA deadlines and requirements could result in steep fines. Here’s what you need to know about ACA penalties.
Penalty A applies to employers that are subject to the employer mandate but fail to meet the health care coverage requirements. Organizations must provide minimum eligible coverage (MEC) to at least 95% of full-time employees. Failure to comply will result in a fine of $2,570 per each full-time employee (excluding the first 30) that do not receive coverage. The fine is calculated monthly but paid annually.
Penalty B ensures that the health plans being offered to employees meet ACA requirements for being ‘affordable’ and offering ‘minimum value’. Organizations that do not meet the outlined requirements will be fined $3,860 per employee receiving a subsidy OR $2,500 per full-time employee (minus the first 30). The lesser of the two fines will be applied.
ACA 2020 State Requirements – NEW
Mandated State Reporting
Starting tax reporting year 2019, mandated state-level ACA reporting includes District of Columbia and New Jersey.
Starting tax reporting year 2020, mandated state-level ACA reporting includes California, Rhode Island and Vermont, in addition to what is already mandated for New Jersey and District of Columbia.
State Filing Deadlines
New Jersey filing deadline for 2019 tax year is 3/31/2020.
DC filing deadline for 2019 tax year is 6/30/2020.
Investing in an ACA solution will not only save your HR team valuable time but also ensure accuracy across all forms and reporting.
ACA is complicated, with several intricate reporting requirements and hard deadlines that must be met to avoid fines. A good ACA tech solution will integrate with multiple HR data streams, resolve any data discrepancies or errors and compile all of the necessary information into a single source.
By unifying all of your data into one place and automating your ACA reporting, you will save countless hours of manual work and guarantee that your employee data is 100% accurate and formatted in an IRS-friendly manner for effortless submission.
Learn More About PlanSource ACA Solutions
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