Attention Employers: Don’t Forget About the Upcoming ACA Reporting Deadlines!
ARC Benefit Solutions has created a comprehensive by-carrier guide for this year’s ACA reporting. Most carriers handle filing for groups under 50 that are fully insured.
Below is a summary overview of the information found in the guide. Please carefully read the following and make note of any upcoming deadlines or changes from last year’s reporting requirements.
Employers subject to Affordable Care Act (ACA) 1094/1095 reporting under Internal Revenue Code Sections 6055 or 6056 should prepare to comply with reporting deadlines in early 2024. For the 2023 calendar year, covered employers must:
- Furnish statements to individuals by March 1, 2024 (an alternative method of furnishing statements to covered individuals is available in certain situations); and
- File paper returns with the IRS by February 28, 2024, or April 1, 2024, if filing electronically. Beginning in 2024, employers that file at least 10 returns during the calendar year must file electronically.
Penalties may apply if employers are subject to ACA reporting and fail to file returns and furnish statements by the applicable deadlines.
Individual statements for 2023 must be furnished within 30 days of Jan. 31, 2024. Because 2024 is a leap year, the deadline for individual statements is March 1, 2024. In addition, electronic IRS returns for 2023 must be filed by March 31, 2024. However, since this is a Sunday, electronic returns must be filed by the next business day, which is April 1, 2024.
Important Dates |
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Individual Statements
- Furnishing Deadline. The IRS extended the deadline for furnishing statements to individuals. The due date for filing with the IRS is unchanged.
- Furnishing Under Section 6055. The IRS has provided an alternative method for furnishing statements to individuals under Section 6055. This alternative method generally requires statements to be provided upon request only.
Covered Employers
The following employers are subject to ACA reporting under Sections 6055 and 6056:
- Employers with self-insured health plans (Section 6055 reporting)
- Applicable large employers (ALEs) with either fully insured or self-insured health plans (Section 6056 reporting)
ALEs are employers with 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. Note that ALEs with self-funded plans are required to comply with both reporting obligations. However, to simplify the reporting process, the IRS allows ALEs with self-insured plans to use a single combined form to report the information required under both Sections 6055 and 6056 (1094-C and 1095-C)
New Electronic Filing Threshold
There is a new electronic filing threshold for information returns required to be filed on or after January 1, 2024, which has been decreased to 10 or more returns (originally, the threshold was 250 or more returns).
Specifically, the instructions for 2023 returns (filed in 2024) provide the following clarifications and reminders:
- The 10-or-more requirement applies in the aggregate to certain information returns. Accordingly, a reporting entity may be required to file fewer than 10 of the applicable Form 1094 and 1095, but still have an electronic filing obligation based on other kinds of information returns filed (e.g., Forms W-2 and 1099).
- The electronic filing requirement does not apply to those reporting entities that request and receive a hardship waiver; however, the IRS encourages electronic filing even if a reporting entity is filing fewer than 10 returns.
- The formatting directions in the instructions are for the preparation of paper returns. When filing forms electronically, the formatting set forth in the “XML Schemas” and “Business Rules” published on IRS.gov must be followed rather than the formatting directions in the instructions. For more information regarding electronic filing, see IRS Publications 5164 and 5165.
Alternative Method of Furnishing Individual Statements Under Section 6055
As of 2019, the individual mandate penalty has been reduced to zero. As a result, an individual does not need the information on Form 1095-B to calculate their federal tax liability or file a federal income tax return. The IRS has provided an alternative manner for a reporting entity to furnish statements to individuals under Section 6055, which applies for all years when the individual mandate penalty is zero.
Under this alternative manner of furnishing, the reporting entity must post a clear and conspicuous notice on its website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent and a telephone number to contact the reporting entity with any questions. For 2023 statements, reporting entities must post the notice by March 1, 2024, and must retain the website notice through October 15, 2024.
ALEs offering self-insured health plans are generally required to use Form 1095-C, Part III, to meet the Section 6055 reporting requirements, instead of Form 1095-B. A self-insured ALE may use this relief for employees who are enrolled in the ALE’s self-insured plan and are not full-time employees of the ALE, as well as for nonemployees (e.g., former employees) who are enrolled in the self-insured plan.
However, an ALE may not use the alternative method of furnishing for full-time employees who are enrolled in the self-insured plan.
If you have any questions about this process, please do not hesitate to contact your client advisor.
This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice.
