Thursday, October 29, 2015

ACA Reporting Penalties

When the Affordable Care Act (more commonly known as ObamaCare) was passed, the IRS updated its Internal Revenue Code (IRC) to include new tax documents that keep health care insurance providers in good standing with the ACA’s new legal and tax requirements.

In order to ensure that every taxpayer receives at least the minimum basic coverage of health care insurance each year, health insurance providers and employers now need to report the coverage they offer to the IRS. Health insurance providers need to report this on Form 1095-B, and certain larger employers* need to report this on Form 1095-C. It’s optional to go ahead and file these forms for the 2014 tax year, but they will be required in 2016 for the 2015 tax year.

New laws inevitably bring up questions, and a lot of people have wondered if there’s a penalty for filing 1095 forms late or not at all. Well, first of all, if you don’t do something required by the IRS and federal government, it’s safe to assume that there’s going to be a penalty. For 2015 reporting, however, the IRS will not impose penalties on a filer for reporting incorrect or incomplete information IF that filer can show that he or she made good faith efforts to comply with the information reporting requirements for 2015.

So what are the big, bad penalties? Here they are, straight from the IRS’s mouth:
  • The penalty for failure to file an information return is generally $250 for each missing return. The total penalty for failing to file during a calendar year cannot exceed $3,000,000.
  • The penalty for failure to provide a correct payee statement is $250 for each missing or incorrect statement, with the total penalty for a calendar year not to exceed $3,000,00.

Special rules apply that can increase these penalties if there is intentional disregard of the requirement to furnish a payee statement. So how about you avoid these penalties altogether? By making sure you get things filed correctly and on time with ExpressACAForms!

If you have any other questions about the new ACA requirements or filing process, feel free to contact our friendly support team of experts located in Rock Hill, South Carolina. Give us a call Monday through Friday, 9 a.m. - 6 p.m. EST at (704) 839-2270 or email us 24/7 at

*Applicable Large Employers (ALEs) are employers with at least 50 full-time employees during a tax year.

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