The Affordable Care Act helps employers provide important healthcare benefits to their employees. But as with any large government action, the Act specifies numerous regulations and deadlines to which we must adhere. With tax season looming, there are a few important dates that both employers and employees should know.
All Applicable Large Employers (ALEs), or those with 50 or more full-time employees, must offer Minimum Essential Coverage to at least 95 percent of eligible workers and their dependents. The cost of coverage must be “affordable” according to IRS methods of calculating affordability, and information on employee coverage must then be supplied to the IRS by certain deadlines during tax season each year.
Businesses with fewer than 50 full-time employees might also choose to provide health insurance coverage to employees, either through the Small Business Health Options Program (SHOP) or via employer-sponsored plans.
These smaller businesses must provide proof of health insurance coverage to their employees with a 1095-B form. These forms will come from the insurance carrier, not the employer.
Finally, individuals who have opted to insure themselves through Covered California will also receive documentation of their coverage. This comes as a 1095-A form sent by the insurance carrier. You’ll need this form to calculate the Premium Tax Credit on your tax returns.
Here are important dates to know:
February 28, 2023. For those ALEs who choose to file paper 1095-C forms to the IRS, they must do so by February 28. This option is only available to those employers who file fewer than 250 1095-C forms, and proposed regulations will reduce that threshold to just 10 forms by the end of 2023.
March 2, 2023. 1095-B or 1095-C forms, as applicable to the business, must be given to all full-time employees by March 2 (this deadline was changed from the previous January 31). Employees who obtain coverage through Coverage California will receive their 1095-A from the insurance provider.
March 31, 2023. For ALEs who file their 1095-C forms electronically, the deadline for doing so is set on March 31. ALEs who file more than 250 1095-C forms are required to do so electronically, but there are many benefits of this method even for smaller employers who opt in. Employers receive instant acknowledgement of submission and a response indicating whether the submission was accepted or rejected.
Employers who miss the above deadlines or file their forms incorrectly can be subject to penalties under Internal Revenue Code 6721/6722. Penalties can range from thousands to millions of dollars, depending upon the size of the company and the extent of errors.
If you have any questions about the above deadlines or filing your 1095-C forms, call us right away for assistance. The earlier we address any problems you’re having, the more likely it is that we can help you meet the deadlines.