2024 ACA Filing and Furnishing Deadlines
Hello again,
This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. We hope you find it useful.
Affordable Care Act filing season is upon us, and reporting errors can result in costly penalties. If you are very busy and juggling a lot of responsibilities, having the right ACA software and services provider can ease the burden of ACA compliance management and filing.
Reporting Deadlines
The 2024 ACA reporting deadlines for the 2023 tax year are:
– February 28th is the paper filing deadline
– March 1st is the deadline for furnishing forms 1095-C to employees
– April 1st is the electronic filing deadline
The threshold for electronic filing has been lowered to 10+ returns in a calendar year. This means an ALE that files 10+ returns or forms in a calendar year is required to e-file in 2024.
Furnishing late or inaccurate forms can result in penalties:
– $60 per return if filed within 30 days of the deadline
– $120 per return if filed 31 days late through August 1st
– $310 per return if filed after August 1st
– $630 per return for willful disregard
– $310 for each return with inaccurate information
Maximum penalties vary depending on company size, with no maximum penalty for intentional disregard.
Data management can be a challenge for ACA compliance, as fluctuating employee hours can be difficult to track accurately, depending on company size. If you are manually tracking or using forms-only software, comprehensive ACA software simplifies year-round compliance management and filing.
If you are manually tracking or do not have a dedicated employee managing data, data omission or cross-communication errors may increase the risk of data inaccuracy. Having a dedicated ACA personnel and year-round data consolidation and tracking will make the reporting process easier.
Passport Software’s IRS-certified ACA software helps ensure your data is accurate in order to avoid potentially costly penalties.
Affordability Rules
According to the IRS, an Applicable Large Employer “may either offer affordable minimum essential coverage that provides minimum value to its full-time employees (and their dependents) or potentially owe an employer shared responsibility payment to the IRS… An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan…there are three safe harbors that an employer may use to determine affordability for purposes of the employer shared responsibility provisions.”
The three affordability safe harbors are the W-2 wages safe harbor, the rate of pay safe harbor, and the federal poverty line safe harbor.
An ALE may use one or more of the safe harbors at its option but only if the ALE offers 95 percent of its full-time employees and their dependents the opportunity to enroll in coverage that provides minimum value for the self-only coverage offered to the employee.
The IRS has lowered the ACA affordability threshold for the 2024 tax year: At 8.39% of an employee’s household income, this is a significant decline from 2023’s 9.12% and 2022’s 9.61%. Therefore, employers will need to carry more of health plans’ costs for eligible employees or risk steep IRS penalties.
Passport Software
Passport Software’s IRS-certified ACA software provides reports that alert when an offer of coverage will be needed and ensures that coverage meets affordability standards. Other reports include the ALE Calculation, Insurance Eligible & Offered, the Initial Measurement Period, the Standard Measurement Period, and the Safe Harbor Comparison reports.
Passport Software’s affordable ACA software and services allow you to streamline year-round compliance management and filing to help avoid costly penalties. We are IRS-approved for optional proxy submission on behalf of our software customers.
Our Affordable Care Act software solution helps you comply year-round and provides automated 1094/1095 filing. The Full Service option is the easiest – just provide a spreadsheet with basic employee information, and we do it all for you year-round, including filing.
We also provide penalty response consultation services and have helped many companies avoid or drastically reduce penalties.
To learn more about how our ACA software and services can ease the burden of compliance, call 800-969-7900. Or, contact us – we are here to help.