ACA Compliance Services: Can You Afford to File In-House in 2022?

ACA compliance services exist to protect employers from astronomical financial penalties that can easily arise from simple mistakes. Late filing, incorrect filing, and failure to file are just a few of the many ways employers can be penalized, all of which can be avoided with ACA compliance services from an industry-leading partner like BASIC.

Who Must Comply?

Applicable Large Employers (ALEs)

• Employers with at least 50 full time equivalent employees in the previous calendar year
• Have specific reporting obligations under the Affordable Care Act (ACA), and face sharp financial penalties when those requirements aren’t satisfied
• Annual penalties for incorrect or late filing can add up quickly and compound the headaches that come with ACA compliance

Employers, of any size, with self-funded plans

• Any employer that provides a self-funded (included level-funded health plans) health plan must file under the Individual Mandate using the 1095 and 1094-B forms.

2022 ACA Filing: Deadlines and Penalties

For the 2022 tax year, ALEs are required to furnish 1095-C forms to its current and past employees by March 2^nd, 2023.

ALEs must file Forms 1094-C and 1095-C to the IRS by February 28th, 2023 if filing with paper or March 31st, 2023 if filing electronically. There is currently no extension for the deadlines to file with the IRS. Electronic filing is required for companies with 250 or more filings (see new proposed regulation below regarding e-filing).

Both failure-to-furnish and failure-to-file (or late filing) each have penalties of $280 per return, and penalty amounts double if non-compliance is ruled to be intentional.

For example, an ALE or an employer with a self-funded health plan, who fails furnish information returns for its 200 employees would be liable for an $56,000 penalty assessment. If the employer also fails to file the return with the IRS, this penalty doubles and would be a total of $112,280 (the extra $280 is for the IRS 1094-C return plus the same amount for all the employee statements. Penalties deemed intentionally failing to file can double these fees.)

Remember, the IRS has discontinued the Good-Faith relief program. Previously, if an employer had filing issues but could prove it made good-faith efforts to comply with reporting requirements, they received penalty relief. There will be no relief for ACA filing on the 2022 tax year, meaning employers will be responsible for the full penalty amount if the IRS finds issues with their filings. Don’t gamble on ACA filing for 2022 and contract a trusted filing partner.