Employers Omitted in Executive Order, ACA Legislation Unchanged
On January 20, 2017, just a few hours after being sworn in to office, President Trump signed an executive order confirming the Administration’s intent to repeal the Affordable Care Act (ACA) and directing government agencies to “ease the burden” of the ACA in the meantime. It’s important to note, however, that executive orders do not directly impact policy – the ACA legislation remains unchanged, and this action does not have a material impact on employers at this time. A few important points that employers must keep in mind include:
- Employers are omitted in the executive order and are not listed as one of the stakeholder groups on which agencies are being encouraged to show leniency.
- The executive order explicitly states in Section 5 that the heads of agencies must comply with applicable laws in considering or promulgating revisions to existing regulations.
- The Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) have not yet issued any new guidance in response to the executive order.
The executive order does not relieve employers of their obligations to furnish statements to employees and file information returns with the IRS. Employers must distribute Form 1095-C statements to employees by March 2, 2017, and file Forms 1094-C and 1095-C with the IRS by March 31, 2017.
Employers should continue their efforts to comply with the legislation and meet applicable deadlines to avoid penalties. In fact, because the IRS recently began sending Letter 5699, it’s important – now more than ever – for employers to ensure complete and accurate forms are filed on time. In the Letter 5699, titled “Request for Employer Reporting of Offers of Health Insurance Coverage (Forms 1094-C and 1095-C)”, a tax compliance officer notifies the recipient employer that it is non-compliant with IRC Section 6056 because the IRS has not received 2015 returns.
Better late than never. The penalty for furnishing forms past their deadline can be significantly less than knowingly not filing ACA forms at all. Any Applicable Large Employer (ALE) that fails to comply with IRC Section 6056, which specifies the information return requirement for ALEs, can be assessed penalties under IRC Section 6721, including:
- Up to $260 per late return with a $3,193,000 maximum penalty assessment
- Up to $530 per return intentionally left unfiled with no limitation on the maximum penalty assessment
If you need help filing ACA forms 1094-C and 1095-C for the 2015 tax year and beyond, Equifax can help. Contact us to learn more.
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