QUESTION: Do employers still need to file Forms 1094 and 1095?
ANSWER: Some employers are confused about whether ACA reporting is required in 2020 for health coverage in the 2019 calendar year. Here’s a reminder that the Affordable Care Act (ACA) is still law and employers must comply with its provisions, including filing forms 1094 and 1095.
The International Revenue Service (IRS) is enforcing the employer mandate by sending Letters 226-J to employers it believes owe a penalty. The determination of whether an applicable large employer (ALE) may be liable for an Employer Shared Responsibility Payment (ESRP) and the amount of the proposed ESRP in Letter 226-J are based on information from IRS Forms 1094-C and 1095-C filed by the ALE and the individual income tax returns filed by the ALE’s employees.
Employers are responsible for furnishing their employees with a Form 1095-C by Monday, March 2, 2020. Employers are responsible for filing copies of Form 1095-C with the IRS by Friday, February 28, 2020 if filing by paper or Tuesday, March 31, 2020 if filing electronically. Like previous years, IRS Notice 2019-63 extends good-faith transition relief from reporting penalties for incorrect or incomplete reporting for 2019 coverage.
While the federal individual mandate penalty is reduced to $0 in 2019, certain states, including New Jersey, Vermont and Massachusetts, have enacted individual mandates and have their own reporting rules.