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October 2021

We’re here to help you stay on top of the impact of health reform. With Health Reform Today, we'll keep you up to date on the latest news. Here are some topics we are following.

With the IRS’ intention to discontinue good faith relief – a grace period that has been in place since the ACA’s inception and that exempted eligible employers from penalties for certain missing or inaccurate information – it’s more important than ever that employers make sure they report codes accurately on Forms 1095-C to avoid costly ACA Penalties; A and/or B.

Limit risk by learning about the most common coding errors. 

Earlier this summer, the IRS issued its draft copy of Form 1095-C for the 2022 reporting season. The changes are few and apply only to employers offering an ICHRA plan for employees. However, these changes can affect affordability determinations – and that can have a big impact on compliance risk.

Employers nationwide are considering levying potential penalties on workers who remain unvaccinated against COVID-19 and who participate in their company’s healthcare plan. But what employers may not know is that a penalty in the form of a premium surcharge could come with an ACA compliance and fiscal wrinkle – the risk of how those surcharges, or penalties, affect the affordability of an employer’s health plan.

It appears that the IRS is doing its own calculations to determine whether employers are using the proper codes to prove affordability. And, if the IRS doesn’t agree with an employer’s use of W2s as a safe harbor, it’s sending them 226-J letters with a notation of “XF” for line 16.

If you or your clients receive a 226-J letter, employers should respond in one of three ways, one of which is to show the IRS you or your client's calculations. 

Read our new article in Corporate Compliance Insights about developments in our nation’s Capital that could expose a corporation to millions of dollars in IRS penalties for not complying with the Affordable Care Act’s Employer Shared Responsibility Payments (ESRP) provision. Our article also offers tips for responding to 226-J letters and steps employers can take to avoid penalties in the future.

Complying with the federal Affordable Care Act's reporting requirements, ICHRA and Form 1095 changes can feel like a full-time job. Then add on managing various state individual mandate reporting requirements and different filing times. Who has the time? Use our State-by-state individual mandate guide to help manage expectations in each state with an individual mandate.

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