Why You Shouldn't Expect Extensions for 2022 ACA Reporting
The Affordable Care Act (ACA) is designed to offer more affordable insurance and make such insurance available to more individuals in need. Each year employers must notate and report all employee health insurance information to the IRS. This is done through Form 1095-B and 1095-C. Will reporting guidelines be different for the 2022 calendar year? The IRS has chosen not to extend the reporting guidelines for the 2022 calendar year. With no extensions for the coming year, what does this mean for employers? Read on to find out how you can stay prepared and compliant.
*This article has been updated to reflect the new proposed IRS regulations regarding the deadline for furnishing forms 1095-C and 1095-B to employees.
Is ACA Reporting Required for 2022?
Employers are required to file all ACA forms to the IRS. Employers are also required to furnish a copy of forms with employees prior to the deadline. All applicable large employers (ALE) members are required to report all form 1095-C information each year per employee. The IRS has released new proposed regulations extending the deadline for furnishing 1095-C forms. The new deadline will be permanently extended by 30 days, making the due date Mar. 2, moving forward.
What are ALEs?
According to the IRS, an ALE is described as any employer who maintains at least 50 full-time employees. This includes full-time equivalents and is based on the prior year's reporting.
When determining the size of a workforce and whether it amounts to 50 employees or more, you will combine the number of full-time employees and the number of full-time equivalent employees. A full-time equivalent is actually the combination of the hours of different non-full-time employees. So if two part-time employees' hours combine for a total that is equivalent to a single full-time employee's hours, they will technically be counted as one single full-time employee.
To do the math, you will calculate all of the part-time employees’ hours per month from the prior calendar year. Then you will do the same for all full-time employees. You will then add these two numbers together and divide them by 12. This will show you the amount of “full-time” employees that are employed by a given organization.
To determine the number of full-time equivalent employees, add the total hours of service per month of all employees who are not full-time, and then divide that number by 120. No one employee should amount to more than 120 hours a month individually.
2022 ACA Reporting Deadlines
On October 2, 2020, the IRS announced Notice 2020-76. This extended the deadline to furnish Forms 1095-C and 1095-B from January 31, 2021, to March 02, 2021.
The IRS has now released new proposed regulations, which will permanently extend the deadline for furnishing 1095-C forms by 30 days. The new due date is March 2, moving forward. This deadline is for providing individuals with forms 1095-B and 1095-C.
The deadline for filing 1095-C is set at February 28, 2022, for those who choose to file paper copies, and March 31, 2022, for those choosing to file electronically.
Currently, the IRS has not announced the exact penalties for late reporting in 2022. Several ways in which you can receive a penalty are by filing with incorrect information which can include using incorrect codes or TIN. You may also be penalized for filing late without acceptable reasoning, or if you file with the incorrect media.
What Does This Mean For Employers?
Firstly, employers need to be aware of dates as listed above. It is crucial that companies and organizations keep in mind that these dates are set to return to the original time frame. Last year we saw an extension, and while many organizations may still be waiting to see if the IRS will offer similar extensions, it would be most prudent to prepare now for the standard non-extended timeline.
Employers may also wish to implement an HRIS. Incorporating a system to help generate 1095-C’s can be beneficial for an organization, as It helps ease the many processes relating to document generation and distribution. If an organization is looking to simplify these processes then an HRIS may be the answer.
You can also stay informed, educated, and up-to-date with ACA reporting and other important topics by using BerniePortal’s comprehensive resources:
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