Simplify ACA Reporting with Our Affordable and Accurate Solution
The Affordable Care Act (ACA) requires employers and insurance providers to report health coverage information to the IRS to ensure compliance with the law’s employer mandate and individual mandate provisions. Applicable Large Employers (ALEs), which are employers with 50 or more full-time employees (including full-time equivalent employees), must offer minimum essential coverage (MEC) that is both affordable and provides minimum value to full-time employees and their dependents.
To demonstrate compliance, ALEs must file Forms 1094-C and 1095-C with the IRS. Similarly, insurance providers and self-insured employers use Forms 1094-B and 1095-B to report coverage information. These filings confirm whether individuals and employees were enrolled in qualifying health coverage throughout the tax year. The deadline for transmitting these forms to the IRS is next week, making it essential for employers and providers to ensure their filings are accurate and submitted on time.
Rules and Requirements for Transmitting Form 1094-B/C to the IRS
Employers and providers required to file must follow specific rules and procedures when submitting their ACA information returns. The transmission process involves preparing the necessary forms, ensuring data accuracy, and submitting them either electronically or by paper, depending on the number of forms filed.
Electronic Filing Requirements
- Employers and providers filing 10 or more of any IRS form must submit them electronically through the Affordable Care Act Information Returns (AIR) system.
- Before submitting returns, filers must apply for a Transmitter Control Code (TCC) from the IRS and complete a communication test to ensure compatibility with the IRS system.
Paper Filing Option
- If submitting fewer than 10 IRS forms, filers may choose to send paper filings. Very few organizations satisfy this requirement.
- Paper submissions must include Form 1094-B or 1094-C as a cover sheet and be printed in machine-readable format.
- Filers must send paper forms to the IRS at the designated mailing address, as specified in the IRS instructions.
What Form 1094-B/C Contains
Form 1094-B/C serves as a transmittal document summarizing the information reported on the individual 1095-B or 1095-C forms. It includes:
- Employer or provider name, EIN, and address
- Total number of Forms 1095-B or 1095-C submitted
- Employer’s status as an Applicable Large Employer (for Form 1094-C)
- Certification of minimum essential coverage offered to employees or individuals
Transmission Acceptance and Error Handling
Once the forms are transmitted to the IRS through the AIR system, the IRS will provide an acknowledgment indicating whether the submission was accepted or rejected. Filers should monitor these acknowledgments to ensure compliance. The possible responses include:
- Accepted: The IRS has processed the forms successfully with no issues.
- Accepted with Errors: The submission was processed, but certain forms contain errors such as incorrect Social Security numbers or missing information. The filer should review these errors.
- Rejected: The entire submission was not processed due to critical errors such as missing required fields or formatting issues. The filer must correct the problems and resubmit.
Employers and providers should review their IRS acknowledgments promptly to address any issues. Failure to submit accurate and timely filings may result in penalties for noncompliance.
With the transmission deadline approaching next week, it is important for employers and providers to review their filings, verify data accuracy, and submit forms on time. By understanding the ACA reporting requirements and following the correct procedures for Form 1094-B/C transmission, employers can ensure they remain compliant with federal regulations while avoiding costly penalties.
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