Published: Feb 22, 2018
2018 is off and running, and we’ve reached that wonderful time of the year when two priorities start invading the minds of many HR and payroll professionals: taxes and the Affordable Care Act (ACA). A lot of us feel our stress building just mentioning the 2018 ACA filing process thanks to all the recent regulatory uncertainty around the program. In spite of all that, if you’re a self-insured employer or have 50 or more full-time equivalent employees, you still need to get through ACA season in 2018.
I know you might want to stop reading already to maintain your sanity, but bear with me for a minute because I’ve got some good news. We’ve uncovered a few useful ACA filing facts that might save you some pain and make your experience this year just a little more tolerable. Ready? Here we go.
1. The IRS announced an automatic extension for providing Form 1095-C
Scrambling to get all your 1095-Cs out to your employees? As it turns out, this year you’ve got more wiggle room than usual. The IRS extended the deadline for distributing the forms this year, so now you have until March 2, 2018.
The other important thing to know, so you don’t have to wade through all this fun language, is that good-faith transition relief is also extended. As long as you get your forms out to your employees and your 2018 ACA filing done on time, you won’t be penalized if there are a few errors in your submission like incorrect codes or missing/inaccurate employee information.
2. If you’re filing less than 250 Forms 1095-C, you have options
Employers with smaller numbers of forms to file can choose to follow either a paper or electronic ACA filing process. The catch if you plan on paper filing, is that your deadline is quite a bit earlier. All paper filing submissions need to be in by February 28, 2018. That’s over a month ahead of the electronic ACA filing deadline, which is April 2, 2018. Also, if you decide to go electronic, make sure you’re filing using the latest AIR XML format because the IRS issued some new required changes for this year.
3. Self-insured employers – you may need to file for more people than you think
If your company is self-insured, there can be some interesting cases where you’ll need to distribute 1095-Cs to and file for individuals who may not be traditional employees or dependents. This happens thanks to a combination of life change events and COBRA coverage.
For example, let’s say you have an employee who gets divorced, and their former spouse was covered on their health plan. In a case like that, COBRA would be offered to that person as part of the life change event. If the former spouse enrolls in that COBRA coverage, you need to create and file a Dependent Form 1095-C for them even though they’re technically not still a dependent. The moral of the story is it’s important to keep track of employee life change events and watch for situations, such as divorces or children aging out of their parents’ health coverage, that might lead to this scenario.
Final thought: ACA compliance – and compliance in general – gets crazy
As you can tell, there’s a lot of time and effort that goes into even just managing ACA filing for a single tax year. When you think about that alongside all the other regulations your organization needs to track, like FMLA and your state’s particular labor laws (looking at you, California), things can get overwhelming fast. On top of that, the costs for getting it wrong are significant.
The number one thing you can do to keep up is have a clear, relevant, and up-to-date plan for compliance that’s baked into the systems you use to manage your HR and payroll processes. With the right kinds of automation, you’ll feel secure in your decisions throughout the year and won’t have to scramble when bigger actions, like ACA filing, start looming on your calendar.