The IRS has finally published draft forms and instructions for 2021 ACA reporting due early 2022. Not much has changed, but here are some highlights:
- ICHRA codes 1T and 1U announced last February are now included
- There is no longer mention of any delay in deadlines
- There is no longer mention of penalty relief for employers with incorrect or incomplete forms that can demonstrate they made a good-faith effort to comply
- The IRS had given us a heads-up last time that good-faith reporting relief will expire unless they are presented with overwhelming evidence that it continues to be widely needed
- The penalty is set to be $280 per missing or incorrect form
- There is no longer mention of relief to provide the 1095-B to individuals (and certain 1095-C forms which could have been provided via 1095-B)
- When the federal individual health insurance coverage mandate penalty was reduced to $0, the IRS had provided insurers and non-applicable large employers (non-ALEs) relief to not have to provide paper copies of the 1095-B to individuals so long as they include a statement on their website indicating it’s available on request
- It appears this relief language is not included this time around…we’ll have to wait and see if that was intentionally removed
Below we provide a table of the draft forms and instructions. We’ll provide an update once these are finalized.
|Type of Employer||Draft Instructions||Draft Transmittal Cover Sheet||Draft Statement|
|Non-ALE||Draft “B” form instructions||Draft 1094-B||Draft 1095-B|
|ALE||Draft “C” form instructions||Draft 1094-C||Draft 1095-C|
If you are interested, a bill has been proposed in Congress called the Common Sense Reporting Act which aims to help employers simplify the ACA reporting and provide data proactively during the year instead. If you’d like to learn more about it and consider whether to reach out to your legislator, please click here and here.
There is also an IRS proposal to decrease the electronic filing requirement from 250 forms down to 100 for returns required to be filed in early 2022, and to 10 for all years after that. In addition, they’re proposing to change it so any follow-up corrections must be filed the same way as the originals (so if original forms had to be filed electronically, then follow-up corrections must also be submitted electronically, even if submitting fewer than 100 corrected forms in 2022 or fewer than 10 corrected forms after 2022). Also, the count to 250 (or 100 or 10) would be a combined count of all forms covered by § 301.6011-2(b), which includes not only the 1094/1095 forms but also 1042-S, 1098, 1098-E, 1098-T, 1099 series, 5498 series, 8027, W-2G, and other forms which may be specified in the future. Furthermore, they propose to require all partnership returns be filed electronically.
- At this time, the draft 1094/1095 instructions above still reference the current 250 threshold at which electronic filing is required, but we’ll keep an eye out for whether that changes when final rules and final forms/instructions are issued.
- Employers submitting a combined total of 100 or more of all forms addressed above should at least have a plan to file them all electronically in early 2022.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.