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Employers and HR professionals, be aware, because the IRS has just released final instructions for IRS Forms 1094/1095-C and 1094/1095-B for the 2023 reporting year. These forms are used for the Affordable Care Act (ACA) reporting requirements. Staying ahead of the game is essential to ensure compliance.
What are Forms 1094/1095-C and 1094/1095-B?
Forms 1094/1095-C are used by Applicable Large Employers (ALEs) to report information about health coverage offered to full-time employees and their dependents. These forms are required for ACA compliance and help the IRS assess whether employers are providing affordable and adequate health insurance to eligible employees. Forms 1094/1095-B are used by entities that provide minimum essential coverage to report information about that coverage to the IRS and to individuals covered by the plans. This includes insurance companies and some self-insured employers.
What Do the Instructions Include?
The release of draft instructions by the IRS provides employers with valuable insights into the reporting requirements for the upcoming tax year. Here are some key highlights:
- Filing Deadlines: The instructions outline the deadlines for filing forms with the IRS and providing copies to employees. Employers must adhere to these deadlines to avoid potential penalties.
- Electronic Filing: This year the IRS changed the electronic reporting requirement. Now employers filing 10 or more information returns must do so electronically. The instructions offer guidance on electronic filing methods and requirements. This is a change to prior instructions.
- Reporting Penalties: Information about penalties for non-compliance or incorrect reporting is included. Understanding these penalties is essential to avoid costly mistakes.
- Form Completion: The draft instructions provide step-by-step guidance on completing Forms 1094/1095-C and 1094/1095-B, making the reporting process more straightforward.
Why Is This Important?
Compliance with ACA reporting requirements is not optional for affected employers. Failure to file accurate and timely reports can result in significant penalties. Staying informed about changes in the instructions and being prepared well in advance of the filing deadlines is crucial for smooth and error-free reporting.
Employers and HR professionals should start reviewing these instructions now to prepare for the upcoming reporting season. The instructions may be accessed by clicking here and here.
BAS can help your organization ensure compliance and navigate the complexities of ACA reporting. With the decreased electronic reporting threshold, look to BAS to ease compliance obligations. For information about BAS’ data collection and reporting service, contact your account manager or email solutions@basusa.com.
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