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ACA Updates and Compliance Tips

Deadlines for Forms

By law, Forms 1095-C must be distributed to full-time employees on or before January 31st of the year following the reporting year. Historically, the IRS has provided automatic extensions of 30 days to distribute Forms 1095-C to employees. On November 22, 2021 the IRS published proposed regulations granting an automatic 30-day extension after January 31st to applicable large employers to issue Forms 1095-C to their employees for calendar years beginning after December 31, 2021. ALEs may choose to apply this automatic extension for calendar years beginning after December 31, 2020 (i.e. for 2021).

Forms 1094-C and 1095-C must be filed with IRS by February 28th of the year following the reporting year if filing on paper, and on or before March 31st if filing electronically.

ESRP Notices

IRS has been sending Proposed Employer Shared Responsibility Payment (ESRP) letters (Letter 226J) to Applicable Large Employers (ALEs). These notices are triggered when at least one full-time employee has been allowed the Premium Tax Credit (PTC) on their individual tax return filed with IRS. Click here for more information on how we can help you respond to these notices

Coverage for Dependents

Beginning in 2016 (or plan years that begin in 2016), an ALE Member is required to offer minimum essential coverage to its full-time employees’ dependents as well as to the full-time employees.

95% Offer Requirement

Each calendar month, an ALE member must offer MEC to at least 95% of its full-time employees and their dependents (or all but five full-time employees and their dependents if there are fewer than 100 full-time employees that month).

Document All Offers of Coverage For Each Benefit Plan Year

ALE members should have a signed and dated form from each employee to whom coverage was offered for each health plan year. The form should: 1) indicate the effective date for the coverage offered (i.e., when would the coverage be effective if the employee chooses to enroll), 2) clearly indicate whether or not the employee is choosing to enroll in the coverage and 3) include the date that the employee executed the form to elect or decline the coverage offered.

Identify Full-Time Employees

Employees designated as full-time at their hire date (reasonably expected to average at least 30 hours of service per week) must be offered an opportunity to enroll in MEC no later than the first day of the fourth full calendar month of employment.

1,560 hours of service or more by variable hour employees during their initial measurement period or during the standard measurement period means that the employee is full-time and must be offered the opportunity to enroll in MEC within the specified period after their hire date or during open enrollment, as applicable.