Phone: (888) 889-9432

ACA Compliance Bulletin: Draft Forms for 2019 ACA Reporting Released

On November 13, 2019, the Internal Revenue Service (IRS) released draft ACA reporting forms and instructions for the 2019 ACA plan year filing.  The drafts include forms 1094-B and C and 1095-B and C as well as the corresponding instructions on how to complete the filing. 

ACA reporting 1094 and 1095-B forms must be filed and provided from the insurance carrier for fully-insured medical plan offerings, while 1094 and 1095-C forms must be filed by an applicable large employer (ALE), i.e. any employer with an average of at least 50 full-time employees, and who offers self-insured medical coverage as proof that the provided coverage meets the minimum essential coverage (MEC) ACA guidelines. 

The draft ACA forms and instructions are very similar to the final 2018 ACA forms with a few modifications:

  • The instructions have been updated to remove any mention of the individual mandate penalty that was removed by an executive order issued by President Trump on January 20, 2017.
  • The revised version of the 1095-C form states that the “Plan Start Month” box will remain optional for the 2019 filing year.  The “Plan Start Month” box is an unnumbered line within Form 1095-C where a two-digit number (01 through 12) is inserted and denotes the month that the plan year begins. For example, if the medical plan starts in April, you would put 04 in this field.
  • Lastly, the updated instructions include the increased ACA penalty amounts for 2019 reporting:
  • Failure to file a correct information return – $270 for each return the failure occurs, with a total maximum penalty of $3,339,000 for the year.
  • Failure to provide a correct payee statement – $270 for each statement the failure occurs, with a total maximum penalty of $3,339,000 for the year.
  • Special rules apply that increase the per-statement and total penalties noted above if there is intentional disregard of the requirement to file the returns and provide the required statements.

In addition to the above potential penalties, there are a few additional items to keep in mind as the 2019 filing deadlines approach:

  1. Even though the individual mandate penalty has been removed for 2019, Section 6055 of the Internal Revenue Code, which requires every provider of minimum essential coverage to report coverage information by filing a return with the IRS, must still provide a 1095 form to those eligible for health coverage.
  2. The updates to the 1094-B and C and 1095-B and C forms and instructions are drafts, and can still be changed by the IRS prior to the 2019 filing deadline.  It is essential that employers use the correct final ACA reporting form and instruction requirements when completing the filing process.
  3. The 2019 ACA filing for Sections 6055 and 6056 of the Internal Revenue Code is due to be filed to the IRS no later than February 28, 2020 if filing by paper, or March 31, 2020 if filing electronically.  Although the IRS provided an extension for filing for the 2018 plan year, it should not be assumed that this will be the case for 2019 and employers are encouraged to use the noted dates as filing deadlines.

The attached ACA Compliance Bulletin provides a deeper dive into the 2019 draft ACA reporting forms and useful links that employers can use to help them with their 2019 filing process.

Contact your Cowden representative for more information on this or other compliance issues.