One major to-do item for many employers each year is completing their ACA reporting. Even though the reporting rules have been around for a few years now, employers continue to have questions. They’re not sure what the rules are, how they apply to their companies, which forms they have to use or when they have to do the reporting.
ACA reporting requirements
The Affordable Care Act (ACA) added reporting rules to the federal tax code that affect many employers—Sections 6055 and 6056. Section 6055 applies to employers that sponsor self-insured plans, regardless of their size. Section 6056 impacts applicable large employers (those with 50 or more full-time and full-time equivalent employees in the prior year), regardless of whether they offer coverage or not.
These employers will need to report information to the IRS and individuals using the appropriate 1094 and 1095 forms. Employers that fail to comply could be subject to significant penalties under the tax code.
The IRS has delayed reporting deadlines in prior years. However, the deadlines for 2019 are currently expected to follow the normal timeframe.
Key ACA reporting dates
Here are the key dates in 2019 (and later years) that employers will need to prepare for:
- Jan. 31: The deadline for furnishing statements to individuals
- Feb. 28: The deadline for submitting returns to the IRS (if paper filing)
- March 31: The deadline for submitting electronic returns to the IRS (required for entities filing 250 or more of either type of return)
Be aware of employer concerns —and possible penalties
Because these rules are complex and completing the forms is burdensome, many employers struggle with meeting their reporting obligations. Even the employers that have been keeping up with the reporting rules may find it challenging to get the reporting done. Collecting the information and completing the forms can be cumbersome and difficult.
Many employers mistakenly believe that there are no penalties if they don’t do the reporting. While the IRS has provided some penalty relief, in most cases, it’s only available for employers that actually file and furnish the required forms on time and make a good faith effort to get the information right.
Any reporting entities that do not meet the deadlines are encouraged to furnish and file the required information as soon as possible. The IRS will take the furnishing and filing into consideration, along with any efforts made to prepare for reporting, when determining whether to decrease penalties for reasonable cause.
Employers need their brokers
Since employers are looking to their brokers for help on compliance, brokers are in a unique position to help answer questions and provide information on reporting. Brokers can also provide the tools to help employers comply.
For instance, at Zywave, our 6055 and 6056 Reporting Workbooks provide a way to collect the information that needs to be reported on the applicable Forms 1094 and 1095. The workbooks provide step-by-step instructions along with information to help educate employers on the rules that apply. With our ACA reporting tool, employers using the workbooks can translate the information they’ve collected into paper forms that can be filed with the IRS and furnished to individuals.
Brokers need to win new business by differentiating themselves from the competition They can also better retain their current books by being the trusted advisor their clients have come to expect. Zywave’s ACA reporting tool is a solution that can help drive meaningful results for brokers, while also meeting a continuing need in the market.
Many brokers are using an ACA reporting tool as a fee-for-service generator, at a rate of about $1-$2 per employee, per month (PEPM), or for an annual fee of $500-$5,000. Whether you decide to charge or not, I’d recommend assigning value to any tool you choose, to make your clients more aware of all that you provide to them. Offering this service and your guidance will help build loyalty and create exit barriers for clients, and promoting your ability to meet employers’ demands is a great way to prospect and win new business.
For more information on the ACA reporting requirements, Broker Briefcase® users can review the following documents:
- Employer Reporting of Health Coverage—Code Sections 6055 & 6056
- Q&As on Employer Reporting of Health Coverage (Section 6056)
- Q&As on Reporting by Health Coverage Providers (Section 6055)
Need to get on board? Don’t miss out and don’t wait. Talk to a Zywave representative about our ACA reporting solution and get started today.