ACA Reporting Requirements 2021 [Updated]
Key ACA Reporting Requirements and Deadlines Coming Up in 2022
Since it was passed in 2010, the Affordable Care Act (ACA) has been an incredibly important – and notoriously difficult – regulation for HR Leaders to monitor and comply with. Each year has presented new challenges, with federal ACA requirements constantly in flux and state ACA legislation changes that can be difficult to interpret and even harder to keep track of.
We’re here to help. Keep reading and bookmark this page so you can reference the ACA deadlines and changes you’ll need to keep track of in the upcoming year.
2022 ACA Deadlines (for the 2021 Tax Reporting Year)
These deadlines relate to filing employer 1095-B/C forms for the 2021 tax reporting year.
Federal ACA Filing Deadlines
- February 28, 2021 – Paper filing deadline with IRS (only permitted if filing fewer than 250 forms)
- March 2, 2022 – Recipient copy deadline for 1095 Form (extended from original January 31, 2022 deadline)
- March 31, 2021 – eFiling deadline with IRS
State ACA Filing Deadlines
After Congress eliminated the individual mandates that were under the ACA, states have begun implementing their own which employers are required to track and file for. While many of these state mandates have yet to go live, these 5 have announced their employer reporting deadlines for 2022:
- California – March 31, 2022 (Furnishing deadline – January 31, 2022)
- District of Columbia – April 30, 2022
- Massachusetts – March 31, 2022
- New Jersey – March 31, 2022
- Rhode Island – March 31, 2022
States Considering ACA Employer Reporting Requirements:
The current pandemic situation has changed dates, but much of the ACA itself has remained similar in the past several years from an employer perspective, aside from small adjustments to account for changes in inflation. Despite this, accurate ACA reporting remains critical and employers are held accountable for any discrepancies or delays in filing.
Reminder: Despite several repeal attempts, employers are still required to offer health care coverage to employees.
ACA 1095 Form Requirements
There are several specific forms that need to be completed and submitted to meet ACA compliance requirements. Keep in mind that solutions exist to expedite 1095 form printing and distribution process, like the ACA Fulfillment Services we offer here at PlanSource.
1094-C Form Requirements
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-B 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, 2022 if you file manually, or March 31, 2022 if you file electronically.
1095-B Form Requirements
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’s 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-B form requirements 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
ACA Penalties for Employers
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 $2,750 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 $2,750 per full-time employee (minus the first 30). The lesser of the two fines will be applied.
ACA Filing Late Fees
The typical IRS fine for employers who do not file by the federal ACA reporting deadlines provided above average $50-$530 per form — and increases each day the single form is late. Which can get expensive quickly, if something gets missed and numerous employee forms don’t get filed correctly.
Changes to ACA Requirements
Individual State Mandates with Employer Reporting
Please refer to information provided earlier in this article to understand if your state of business is affected by these updates. No new states enacted individual state mandates for the 2021 reporting year. There were 2 new states last year with additional employer reporting requirements that went into effect for the 2020 reporting year: California and Rhode Island.
Affordable Coverage % of Employee’s Income
One specific change that was enacted for the 2021 tax reporting year is the percentage of an employee’s income that an employee’s health care contribution must not exceed, which currently stands at 9.83%. Previously, this number was 9.78% for the 2020 reporting year; in 2019 it was 9.86%, meaning the cost of employer-provided health care must not exceed 9.86% of an employee’s income. In 2021, that amount will be increased slightly to 9.83%. This amount will determine whether your health care is considered “affordable,” an important requirement for ACA compliance.
New ICHRA Codes
Last year, the IRS mandated that ICHRA (Individual coverage health reimbursement arrangements) be reported on the 1095-C forms, and there was an updated form to account for this change. ICHRA mandates that an employer provides a class of employees with a monthly allowance that can be used to purchase individual health coverage from the marketplace.
This year, the IRS has introduced two new codes to the 2021 reporting form draft related to how ICHRA plan affordability was determined:
- Code 1T: Determined using the zip code of the employee’s primary residence.
- Code 1U: Determined using the zip code of the employee’s primary employment site.
Good Faith Relief Ending
Though we do not yet have 100% certainty, based on all indications currently, we believe Good Faith Relief will not apply with respect to 2021 ACA filings. As such, all aspects of the filings will be subject to potential penalties for incorrect or missing information.
“Reasonable cause” relief is still available if an employer can show that the error was not due to an employer mistake, negligence, etc.
ACA Reporting Solutions
Investing in an ACA solution will not only save your HR team valuable time but also ensure accuracy across all forms and reporting. As you no doubt already know, the 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 Compliance Solutions
ACA made easy! See how our ACA compliance solutions can help your team stay on top of ACA measurement and reporting requirements, so your business stays compliant. And check out our ACA Fulfillment Services to take the hassle of printing and distributing 1095-b forms to employees this year!
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You should not act or refrain from acting based on any content included in this site without seeking legal or other professional advice. The contents of this site contain general information and may not reflect current legal developments or address your situation. PlanSource disclaims all liability for actions you take or fail to take based on any content on this site.
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