Affordable Care Act: What do Employers Need to Know?

Important ACA Deadlines:

• 1095-Cs need to be provided to employees by March 2, 2024.
• Forms 1094-C & copies of the 1095-Cs need to be filed with the IRS
  • Paper filing needs to be done by March 2, 2024 OR
  • Electronic filing (required for employers with more than 10 1095-Cs) must happen by March 31, 2024.

Make sure your reporting is done accurately and timely – Integrity Data’s ACA Compliance Solution can help.

ACA Employer Mandate stands: continue tracking throughout 2023

Employer obligations remain unchanged and enforcement has started: a significant number of employers have received letter 226J aka “a penalty letter” from the IRS – here’s some advice on what to do if you get one of those.

Some previous changes you may not have been aware of

The Individual Mandate was effectively repealed as of January 1, 2019

The Tax Cuts and Jobs Act (aka the new tax law) touted repealing the health law but it only repealed the requirement that individuals are required to have ACA-compliant health coverage or else pay a penalty in the sense that the penalties are reduced to zero.

Here’s what that could mean for employers.

As part of the recent deal to reopen government, two important ACA changes were made that affect employers:

1. A new IRS proposed ruleseeks to phase out the paper-filing option by 2023, leaving it intact for only the smallest subset of employers. Specifically, the proposed rule would reduce the 250-count threshold to 100 for filings due in 2022. By 2023 and thereafter, the count threshold would decrease to an even smaller 10 filings. The proposed ruling also applies to worker forms like W-2 and 1099s. So, if the IRS finalizes this proposed rule, many employers may no longer be able to file paper forms with the IRS
2. More families will be able to access Affordable Care Act subsidies next year. The final rule aims to address a longstanding problem with ACA’s regulations pertaining to the affordability of employer coverage, known as the “family glitch.” The rule allows family members of workers who are offered affordable single coverage but unaffordable family policies to qualify for subsidies on the ACA exchanges. The resolution of the “family glitch” brings significant implications for employers. Employees now have the option to opt out of their employer’s coverage and instead join their family members in the ACA marketplace. The Inflation Reduction Act, signed into law in July, further extends ACA subsidies through 2025, making PTCs available to Americans for no more than 8.5% of their household income.

What’s next for ACA employer reporting?

Plan on ACA reporting for years to come

Reporting is still certainly required and given the IRS’s clear intention to enforce the mandate, and the appeal process for the Texas ruling to take a while, expect reporting to continue. Make sure you have the systems and processes in place to do so accurately and efficiently – Integrity Data’s ACA services can help.

Keep an eye on developments 

There may be at least a softening of the employer mandate – for example, making the reporting easier for employers by simplifying it. This won’t happen quickly but it is definitely worth keeping an eye on by following our ACA Tracking and Reporting Compliance blogs.