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Beware of ACA Penalties
for Employers

Noncompliance with the current rules could results in severe ACA penalties for employers.

Important Deadlines to Prevent ACA Fines

For the first time in 2016, employers were required to report employee health insurance coverage under the Affordable Care Act (ACA), which was overwhelming for many. What made it a little more manageable, however, was the IRS pushing out the deadlines. You got an extra two more months to distribute employee copies and three more months to e-file with the IRS.

We’re now approaching the second year of mandatory ACA reporting – and it’s highly unlikely you’ll get the same extensions.  Rather, you should mark your calendars with these specific 2017 deadlines:

Form Recipient Copies Due Due to IRS

1095-B, 1095-C

March 2, 2017

Electronic filing due March 31, 2017

Be Careful: Penalties for NonCompliance Are Steep

You must comply with ACA reporting requirements, or risk steep penalties. Penalties can apply for:

Beginning January 1, 2016, the IRS penalty for failing to file or furnish ACA forms more than doubled from $100 to $260, with a maximum of $3 million. Because the penalty applies separately to the form filed and the recipient copy furnished, you could incur a combined penalty of $520 per return.

Capturing and Tracking Necessary Data

The information gathering process is challenging for many businesses. To capture all the data required for 1095 reporting, you’ll need to pull from four major sources or internal departments: HR, payroll, benefits and time-tracking systems. This requires careful coordination, sharing and monitoring to complete the forms accurately and on time.

The key items you need to track:

Most likely pulled from payroll or time-tracking system

Most likely pulled from HR records

Most likely pulled from HR records and benefits

Strict security is also necessary. Because the employee’s name and health insurer appears on the same form, the data is considered protected health information (PHI). Using a solution that is SOC-certified and HIPAA-compliant, like, can provide an added layer of protection with this type of data.

A few essential Do’s and Don’ts can ensure a smooth filing process:

By following the guidelines above, you can drastically improve your chances of a smooth and accurate ACA filing process. However, even with the best intentions, data errors can occur – which can result in an audit.

No one wants to be under the scrutiny of the IRS. Learn some important guidelines on preventing an ACA audit.


Start using efileACAforms today
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