Meet 2021 ACA Timeline and Avoid Common Mistakes

Meet 2021 ACA Timeline and Avoid Common Mistakes

Another calendar year is nearing its end, and that means the 2021 ACA reporting season is upon us. For HR teams responsible for ACA compliance and management, now is the time to get ready for your IRS annual ACA filings. Here is our guide to help you do just that.

Currently, the penalties for failure to file a complete and accurate Form 1095-C and related forms by the March 31, 2022, deadline are up to $280 per return, with a maximum penalty of $3,339,000 per organization. If the IRS determines that the failure was intentional, the penalty is $560 per return, and there are no limitations to the total penalty amount per organization. Read more about ACA penalties here.

Your guide to helping you with reporting readiness
In order to have a more successful reporting season, your team might want to focus on the following strategies:

1. Avoid common form errors
Many companies jeopardize their ACA compliance because of simple information reporting mistakes. You can help limit your risk and have a better chance of reporting accurately and on time by planning head. Here are a few things to be on the lookout for.

  • Employees with multiple employers: Be alert to cases where employees work for multiple employers within the same control group and be sure to avoid related reporting mistakes.
  • Offers of coverage: Many companies make errors by not properly identifying offers of coverage, especially for employers who use passive annual enrollment strategies.
  • Form 1095-C: Ensure the correct information is populated in Form 1095-C for all employees. Take note of the following and check out our guide for additional detail:

For more information and to find out how to Avoid Common Form Errors in our new blog.

2. Be aware of reporting deadlines and extensions
Keep these important dates front of mind as you progress in your ACA information return preparations.

IRS REG-109128-21 extends the deadline to supply Form 1095 to employees for tax year 2021 to March 2, 2022. For Health e(fx) clients, reporting dates remains unchanged despite IRS Extension for the 2021 reporting season. Clients can find Health e(fx) reporting deadlines here.

If you plan to apply for a filing extension, make sure you set a deadline that gives you ample time to apply. If you choose to file for an extension, Form 8809 must be filed on or before the due date of the return. All Health e(fx) clients will follow the originally planned fulfillment deadlines and will not follow the extension timelines.

* Note that your ACA solution provider may have additional key dates and deadlines you must meet. For Health e(fx) clients, key dates can be found here.

States who have enacted their own individual mandate often times have deadlines differing from the IRS dates. If you have employees in any of the states with their own mandate make sure you know the specific deadline that you are trying to meet.

**While the state filing deadline is March 31, 2022, California has indicated that penalties will not be assessed if filing occurs by May 31, 2022.

3. Make sure the integrity of your data is accurate
Inaccurate data can result in incorrect forms, form codes and potential compliance issues, so better protect yourself and your company by performing an ACA audit. This will help you to identify problems and correct them quickly.

Use your audit to make sure key data points are accurate, including your employees’:

  • Legal name
  • Social Security number
  • Date of birth
  • Address
  • Employment periods
  • Service hours
  • Wages
  • Rate of pay
  • Employee class
  • Location
  • Health benefits eligibility periods

Ensuring a more successful 2022 reporting season
With the IRS assessing potentially costly Employer Shared Responsibility penalties to companies who may be out of compliance, accurate completion of your forms is more important than ever. We can help.

And if you don’t currently work with Health e(fx), please consider our solution to help you more actively manage your ACA compliance requirements for the 2022 reporting year. Selecting a vendor who provides a system, tools and support to help you manage end-to-end ACA compliance is one of the most important decisions your company can make.

As a reminder, conducting a monthly audit of your employment classifications — including full-time, part-time, variable and seasonal — will help ward against errors and potential fines that accumulate monthly.

Lastly, if you have any questions about the 2022 ACA reporting season or how Health e(fx) can support you in future reporting years, please don’t hesitate to contact us.