Although the automotive industry is unique, automotive suppliers have the same employee benefits issues as other employers. When it comes to health care, this is especially true. In this issue of the Ahead of the Curve blog, we address the Affordable Care Act (ACA) employer reporting deadlines and recent IRS enforcement activities in connection with the employer shared responsibility mandate.
Two critical components of the ACA are the individual‑responsibility and employer shared responsibility provisions. While the Tax Cuts and Jobs Act of 2017 (TCJA) effectively repealed the individual mandate, it did not eliminate or change the employer shared responsibility mandate.
Employer Reporting Deadlines
The IRS has once again extended the ACA reporting deadlines for 2017 for employers subject to the employer shared responsibility mandate (employers with 50 or more full-time equivalent workers during 2016). The deadlines are as follows:
- 1095-C forms must be distributed to employees by March 2, 2018 (original deadline was January 31, 2018). No additional extensions will be granted.
- 1095-C forms must be filed with the IRS, along with a 1094-C form, by February 28, 2018, if filing by paper, and April 2, 2018, if filing electronically (the IRS did not extend these two deadlines).
The IRS has also extended its good faith transition relief to the 2017 forms. Under this relief, the IRS will not penalize an employer if it turns out the information on the employer’s forms was inaccurate or incomplete, so long as the employer distributed and filed the ACA forms on time and can demonstrate it made a good-faith effort to comply with the ACA’s information reporting requirements.
ACA Penalty Assessments
Employers subject to the ACA employer shared responsibility mandate face penalties of either:
- $2,260 per full-time worker per year if the employer does not offer coverage to enough of its workforce; or
- $3,390 for each worker who obtains federally subsidized coverage through an exchange even if the employer offers enough workers coverage.
The IRS has started sending out notices to assess ACA penalties based on 2015 employer responsibility reporting (1094-C and 1095-C forms). We expect numerous errors with the assessments, however, based on well-documented problems the IRS encountered when processing these forms. If you receive an assessment notice, you will want to scrutinize it carefully.
If you need any assistance with ACA reporting, receive a penalty assessment notice from the IRS or have other questions about ACA compliance, please contact Norbert Kugele
, Stephanie Grant
, Kent Sparks
or any other member of the Warner Norcross + Judd Employee Benefits Practice Group.