Affordable Care Act (ACA) reporting for 2020 is just around the corner. From now until March 2021, employers will be focusing on preparing for 2020 ACA reporting, including creating and sending 1095-Cs to employees and submitting the transmittal 1094-C to the IRS.
Here are a few best practices to help ensure your company or agency is ready for a smooth 2020 ACA reporting season:
Be proactive in checking for errors in your company’s 2020 ACA data.
Employee demographic data such as zip codes, start dates, termination dates, coverage dates, waivers, and other pertinent ACA data must be accurate. Checking for errors and correcting them now will save your company time before looming deadlines.
Review ACA data from previous years.
What did you learn from previous years of reporting? What were your pain points in preparing and processing your ACA data? Conduct a prior-year audit and identify employees or processes that need attention. (Be careful not to repeat the same mistakes that were made in previous years!)
Stay informed of any IRS rules or changes regarding Forms 1094-C or 1095-C.
The IRS recently posted the final copy of the 2020 1094 and 1095 forms. Make it a point to check the information about all forms, instructions, and publications are at IRS.gov/Forms.
Plan for March 2, 2021 deadline for 1095-Cs to individuals
The IRS automatically extended the deadline for individuals to receive 1095-C forms from employers. The original January 31, 2021 deadline is now March 2, 2021. Thus, no additional extensions will be granted for the furnishing of the 1095-C for the 2020 ACA Reporting plan year.
Be aware of individual state mandates.
A trend is growing among states to legislate requirements for taxpayers to provide health insurance coverage. Employers must offer coverage data to the state in addition to the IRS. To date, the below states will require ACA reporting on its individual taxpayers for 2020, but other states will soon be following this trend.
Massachusetts – Effective since 2006
New Jersey – Effective since 2019
California – Effective for the 2020 tax year
Rhode Island – Effective for the 2020 tax year
Vermont – Effective for the 2020 tax year
District of Columbia – Effective since 2019
Looking for a proven solution for your organization’s ACA reporting needs?
ACA-Track™ is a stand-alone system that integrates with any payroll, time-capture, and benefits management system while placing no restrictions on your operational systems. ACA-Track helps your business or organization to evaluate its ongoing state of compliance and provide accurate and timely data and information.
The software electronically creates IRS reports and maintains all ACA compliance data in one location for easy retrieval in the event of an IRS audit. ACA-Track ensures your ability to comply with ACA standards successfully and avoid penalties, fines, and fees.
ACA-Track supports ALL data elements necessary for IRS compliance.