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.
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.
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 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 by 12. This will show you the amount of “full-time” employees that are employed by a given organization.
To determine the amount 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 31, 2021. The 30 day extension is not expected for 2022 reporting as we have yet to see an announcement an entire month after such an announcement would have been expected.
We can only assume that the deadline for 2022 has not been extended, meaning that the deadline is set for January 31, 2022. This deadline is for providing individuals with forms 1095-B and 1095-C. This places the deadline 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?
Though it has not officially been announced, the lack of any sort of would-be announcement makes it quite clear that the IRS has no intention of extending these deadlines at this time. This being the case, what do employers need to be aware of?
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.
Source: Bernie Portal