2022 ACA Penalties and Parameters

2022 ACA Penalties and Parameters

While HR teams are busy with 2021 reporting season, it’s important to keep 2022 ACA requirements in mind. With the IRS actively assessing potential penalties, keeping a close eye on changing parameters is essential.

For 2022, employers must continue to:

  • Provide affordable coverage that provides minimum value to 95% of full-time employees for each calendar month of the year.
  • File accurate and complete Forms 1094 and 1095 with the IRS, as well as provide timely and accurate employee statements (Form 1095) to employees.
  • Actively manage employee eligibility and compliance under the employer mandate.

Important note for controlled groups (i.e., companies that have multiple common ownership or parent-subsidiary relationships): All companies in a controlled group are considered a single employer for the purpose of ACA reporting. Therefore, it’s important to maintain compliance for all the included entities within the group to avoid penalty risk.

Key ACA Parameters and Penalties for 2022

Why you Should Pay Attention
The IRS continues to assess potential penalties for previous reporting years. Letter 226-J, distributed by the IRS has included a reporting assessments for individual companies in the millions! IRS assesses penalties for failure to file, late filing, inaccurate filing, and failure to meet the 95% threshold for offers of minimum essential coverage to full-time employees (as defined by ACA), and for premium tax subsidies paid to full-time employees who didn’t receive an affordable offer of coverage that met minimum value. Employers may be held responsible for additional penalties for late penalty assessments (often reported via a IRS Letter 226-J). The IRS is indicating that they will also pursue liens against the business if penalties aren’t paid.

It’s important to remember that this risk can be managed. Selecting a vendor who provides a system, tools and dedicated account management support to manage end-to-end ACA compliance is one of the most important decisions a company can make today. Not all ACA solutions have figured it out. The good news is, Health e(fx) was built from the ground up to overcome this challenge.

Health e(fx) continues to closely monitor changes to the ACA and reporting requirements and will keep you updated on healthcare reform. Our system was specifically designed to adapt to continuously changing healthcare regulations, and to handle even the most complex data sets.

We’re leading through change, providing you with data insights that will help you make the best decisions for your business and your employees.