Where You Work Counts: ACA State Reporting
You've filed your Affordable Care Act (ACA) Forms 1094-C and 1095-C to the IRS and sent copies of Form 1095-C to your employees, but are you done with year-end tasks related to health care reform? Have you complied with the various state health coverage reporting requirements? Do you even know which applies to your business?
The ACA employer mandate requires applicable large employers or "ALEs (Applicable Large Employer)" (generally those with 50 or more full-time employees and full-time equivalents) to offer affordable, minimum value minimum essential coverage to full-time employees and their dependents or potentially pay a penalty. In addition, ALEs are required to report health coverage information to the IRS on Forms 1094-C and 1095-C each year. The data on these forms assists the IRS with enforcing the employer mandate.
Under the ACA, there is also the individual mandate that requires every individual to have qualifying health coverage, also known as minimum essential coverage. Through 2018, if you did not have coverage each month, you could be liable for a penalty unless you qualified for an exemption. However, beginning January 1, 2019, the penalty went away as part of the Tax Cuts and Jobs Act and as a result we saw some states take matters into their own hands.
For several years now, ALEs have been required to not only file ACA Forms 1094-C and 1095-C with the IRS, but also with some state agencies and Washington, DC (District of Columbia). California, New Jersey, Rhode Island and Washington, DC all enacted their own version of the individual health insurance mandate and require employer reporting on their residents. They need this health coverage information to enforce their mandates and while the information sent to states is the same as what is filed to the IRS, the file formats, transmission methods, deadlines, and penalties for failing to file and furnish are different. In some of these states, there is no paper filing option available, and employers must pass a testing process to be granted access to file.
Are you in compliance with ACA state reporting?
Do you know if you have met the requirements to file in each of these states? Are you tracking your employees' address changes throughout the year to know when they may be a resident, even for part of the year, of one of these states?
Having a plan in place to monitor these changes, manage the varying complexities and meet strict deadlines is key to ensure your business is compliant with all required employer reporting related to health care reform.
Try our ACA penalty calculator and learn how to proactively avoid penalties. And learn about a better way to manage ACA compliance.
