The steady drumbeat announcing the coming leviathan of Affordable Care Act-related employer reporting continues to grow louder, even as we wait for the IRS to issue the final forms and instructions that will be used for reporting 2015 information in early 2016.
This week the IRS provided additional information on the process for submitting reporting forms to the IRS and opened up the second step in the process for obtaining the necessary credentials to file. The electronic filing system known as the ACA Information Return (AIR) system is significantly more complex than merely uploading a PDF file containing the pertinent information and will require a concerted effort to comply with parameters established by the IRS.
Lockton Comment: As detailed in our Alert, insurers and employers with 50 or more full-time and full-time equivalent employees are required to file information returns with the IRS to show which individuals complied with the ACA’s individual mandate and which employers complied with the employer mandate. This reporting is accomplished through IRS Forms 1094-B, 1094-C, 1095-B, and 1095-C (Reporting Forms).
Reporting Forms reflecting 2015 information are due to the IRS by February 29, 2016, or March 31, 2016, if the Reporting Forms are submitted electronically. Employers that are required to file at least 250 Reporting Forms are required to file electronically, though the IRS encourages all employers to electronically file.
Employers submitting their own Reporting Forms, third parties submitting Reporting Forms on behalf of others, and developers of filing software (combined, Submitting Entities) are required to complete the following steps prior to being able to electronically submit any Reporting Forms:
- Register with the IRS’s e-services website (Note: This process requires submission of personal information about the person registering for the Submitting Entity);
- Obtain an AIR Transmitter Control Code (TCC), a unique identifier authorizing each Submitting Entity to submit the Reporting Forms, and
- Pass a series of technical/system tests to ensure that Reporting Forms will be properly submitted when due.
Submitting Entities are now able to complete the first two steps, and we anticipate the third step will become available later this year.
Conflicting guidance suggests that employers submitting their own paper Reporting Forms may need to complete the first two steps but not the third step. This seems like unnecessary work for employers submitting paper forms, and we hope future guidance provides additional clarity.
We expect that most employers will not need to complete this process, because they will rely on a third party to submit on their behalf. Frankly, avoiding the need to complete this process is one more good reason for employers to use a third-party vendor to help populate and submit the Reporting Forms.
For those employers that plan to electronically submit on their own Reporting Forms, we see wisdom in waiting until later this year to begin the registration and testing process. The process is brand new, and like the HPID and TRF processes before it, we expect that changes will be made and additional guidance will become available over the next several weeks and months. Further, while the IRS has indicated that there will be no delay for reporting, we are still hopeful that the IRS will change its tune and issue a delay later this year.
The IRS has developed a website for those Submitting Entities that want to get an early start on the registration process. Among other information, this site contains links to the e-services registration page, a tutorial for obtaining a TCC and draft publications discussing the anticipated technical/system requirements for submission.