The ACA – Pay Attention to These Things to Avoid Penalties

The ACA – Pay Attention to These Things to Avoid Penalties

Soon, midsize business owners will be required to report health coverage plan information to its full-time employees and the IRS. This is because under Section 6056 of the Internal Revenue Code, there is the new Affordable Care Act requirement (ACA). The reports must be filed early in 2016; the Trade Preferences Extension Act of 2015 has stated that companies that failed to file it by the deadline will get a doubled penalty. If you haven’t done it yet, don’t worry; we’ve got you covered. Let’s go over a few things you need to pay attention at to remain compliant with the ACA.




1. Are you required to report?

This is the first thing you have to do, figure out whether you are required to report your 2015 health plan coverage to the IRS or not. The first thing you should do to figure this out, determine whether you are one of the applicable large employer (ALE) or not. To do this, you can check out the ALE Calculation Fact Sheet in the TriNet. This calculation sheet will help you to know if you are an ALE under the ACA guidelines for 2015.

However, in general, a company is considered an ALE if they employed 50 or more full-time employees monthly (full-time equivalent employees included) in the previous year. If you have 50-99 full-time employees who were not subject to the Employer Shared Responsibility “pay or play” provision ACA in 2015, you have to report it. Do not forget all of the requirements in the section 6056 to apply to all ALEs.


ACA filing deadline

2. Be aware of the filing deadline.

Remember, there are deadlines and if you fail to file your reports by the deadline, you will get penalties. If you do not want to get any penalties, then you have to make sure that you aren’t missing any important dates. Do not forget that ALEs have to submit the first Section 6056 form in early 2016, including the group and employee medical plan coverage information. Here are some important dates you don’t want to miss:

– January 31, 2016: This is the deadline for your full-time employees to file their form 1095-C

– March 31, 2016: This is the deadline for the submission of electronic file form 1094-C.

After you file your documents, the IRS will use the information to determine whether an employee is eligible for a premium tax credit, and they will use it to complete the data in ALE with the ACA Employer Shared Responsibility Provision. In addition, the reports are also expected to assist the documenting process of the employees because they have satisfied Individual Shared Responsibility Provision of ACA.


ACA Penalties

3. Penalties you will get if you fail to file your reports.

As stated above, the penalty has been doubled. Companies that failed to meet the filing requirements will have to pay $250 for each incorrect return; before, they only have to pay $100. In addition, they have to pay $500 for each return is there is any violation to intentional disregard. Even though the penalty might be reduced in some circumstances if the reports are corrected within the appointed time, it is better to avoid making mistakes entirely.

Do not forget those penalties could add up quickly. This is because there is a penalty for ‘each’ return. So for example, if you have 70 full-time employees who failed to complete the requirements, you would have to pay around $35,000, which is not cheap at all.


ACA Reporting Requirements

4. Remember the information required.

Fortunately, there is good news. Companies that made great faith effort to complete and submit the forms of 1094-C and 1095-C for 2015 will not get any penalties. You still need to document that you made a good-faith effort to avoid penalties, so you couldn’t ignore the reporting requirements. This is why if your company is an ALE, you should take note of the information required to fill out the form by the deadlines.

If you need any assistance, or if you have any questions about the filing requirements of section 6056, contact the IRS. They will help and answer your questions about how to complete the forms.



The new Affordable Care Act requirement might complicate things a little bit, but it is for the sake of better and more structured system. Figure out whether you are one of the ALEs, be aware of the set deadline, be aware of the penalties and make sure that you know the reporting requirements details. If you pay attention to all of these things, you can definitely avoid getting penalties. For more information, you can visit the Affordable Care Act page on the IRS website.


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