Skip to main content

Answers to your top five ACA IRS reporting questions

Person reviewing IRS reporting documents with a computer and papers on table.

Are you ready for 2022 Affordable Care Act-required reporting to the IRS? Do you need to verify the accuracy of prior year forms?

With "transitional good faith relief" in the rear-view mirror, the industry is anticipating an increase in penalty letters, which will likely lead to more audits. Employers cannot afford to get their 1094s and 1095s wrong.

Check out the top five pressing questions from clients on ACA IRS reporting and the answers from our benefits experts.

Q1. We didn’t know about ACA reporting before now. What if we did not file in prior years?

The best course of action is to retroactively file for prior years. You should also contact legal counsel.

Q2. What if we discover a mistake made in a prior year filing, such as missing a newly eligible employee?

The best practice is to file retroactively. You'll need to carefully recalculate the employee’s eligibility based on whatever measurement periods your organization selected. You should also contact legal counsel.

Q3. What data do we need to file?

You'll need a combination of plan sponsor information, plan information, census and enrollment data. If your plan is self-insured, you will also need dependent information.

Q4. How do we determine if our organization is at risk for an IRS ACA penalty?

The answer lies in the quality of your organization's data and the integrity of your measurement period reporting, IRS reporting and/or filing. To mitigate risk, spot-check a few different recipients under various scenarios, such as mid-year new hires, mid-year terminations, part-time to full-time, FT to PT, COBRA, etc.  Make sure you've filed for all Employer Identification Numbers.

Q5. What happens if our organization gets a penalty letter, and how do we respond?

The first thing to do is contact the IRS and request an extension. Secondly, review the reason for the penalty and determine if it makes sense. Assuming it makes sense, hire an independent third party to audit your reporting and/or filing in question and make any needed changes to your original return.

Popular posts from this blog

SECURE 2.0 Discussion Series: Session One

SECURE 2.0 provisions: What we know and what’s still up in the air The SECURE 2.0 Act, signed into law in late December 2022, has factored heavily in retirement industry discourse since the final legislation was published. As with any legislation of this depth and breadth, there’s a lot to digest and the industry takes time to adjust. Our team of experienced advisors recently met to discuss some of the more nuanced provisions of the legislation, such as changes to Roth contributions, and what they could mean for plan sponsors. Panel participants included the following HBS team members: Noah Buck, Christina Bauer-Dobias, Sean Bayne, Vincent Bocchinfuso and Kathleen Coonan. Highlights of our panel’s conversation below should serve to help guide plan sponsor thinking. On Roth employer contributions NB – In addition to deferring pre-tax or Roth, plan sponsors can now allow employer contributions to be classified as Roth, is that right? VB – Correct. This is immediately available to plan s

COVID-19: Retirement and Benefit Plan Resources

As the COVID-19 crisis continues to unfold, we are closely monitoring news and updates from top sources. We’ll be updating this section as new developments unfold. Here are several key articles and links to help plan sponsors and administrators navigate the COVID-19 impact to retirement and benefit plans: Retirement Plans 4 Key CARES Act Provisions for Retirement Plan Sponsors Markets React to Coronavirus   Important Considerations for Retirement Plan Sponsors during the Coronavirus Pandemic In Fed We Trust Participant Education Services: Timely Help from a Safe Distance CRDs 100% Taxable for New York State and Local Income Tax Purposes in 2020 IRS Permits Remote Notarization of Participant Elections   Employee Benefits CARES Act Expands Health Coverage Rules Understanding the Historic $2 Trillion Stimulus Package Employee Compensation and Benefits During Closures and Furloughs DOL Clarifies Exemptions to Coronavirus Paid Leave Laws Small Business Exemption to

SECURE 2.0 Discussion Series: Session Two

The retirement industry has been buzzing since the SECURE 2.0 Act was signed into law last December. This new, comprehensive legislation has sparked a lot of discussion. As with any major reform, it will take time for the industry to fully adapt and understand all its implications. Following our April 11 webinar on the first three months of the industry’s response, our team reconvened to discuss some of what we have heard from our client and vendor partners and to respond to some of the great questions we heard from attendees. Panel participants included the following HBS team members: Noah Buck, Christina Bauer-Dobias, Sean Bayne, Vincent Bocchinfuso and Kathleen Coonan. The Discussion SB – Throughout the webinar, I wanted to stress two things: 1) confusion about where to start and what is expected from plan sponsors is normal; and 2) even more than three months in, this is a developing situation and people should expect changes as time goes on. With those in mind, engagement through