Expect Tighter Enforcement of ACA Employer Shared Responsibility Provisions in '22

Employers should be prepared for what to expect from the IRS if they did not meet the requirements under the employer shared responsibility provision of the Affordable Care Act.

The Internal Revenue Service is stepping up its enforcement provisions by discontinuing the good-faith transition of the employer shared responsibility for incorrect or incomplete Form 1094-C/1095-C beginning in Tax year 2021. This could result in hundreds of thousands to potential million-dollar fines on employers.

Below are the penalties for untimely or inaccurate filing and/or furnishing of 1094-C/1095-C:

Beginning in 2021 (this year’s filing), all reporting must be accurate and timely. Corrections will require a letter of explanation and evidence to accompany each correction. The process will be significant, arduous, and time-consuming. Failure to adequately and accurately prove compliance, will result in a lengthy appeal process.