ACA Reporting 2022: 5 Benefits of Filing Electronically

Satisfying the Affordable Care Act (ACA) employer mandate and meeting the reporting requirements and filing deadline is always a complicated task for applicable large employers (ALEs). Now, 2021 reporting will be especially tough because the pressure is higher for every file form to be accurate. This tax year, the IRS has eliminated good faith relief, putting employers on the hook for any errors in their Form 1094-C or 1095-C. To ease the burden of meeting ACA reporting deadlines this year, employers should consider electronically filing their ACA reporting forms. MP’s HR and payroll compliance experts share five reasons reporting entities should complete their ACA reporting online this calendar year. (Note that employers that will have more than 250 forms to be filed with the IRS must file electronically. Employers with more than 250 full time equivalent employees cannot file paper forms with the IRS.)

1. Electronic ACA reporting may eliminate errors and reduce penalties.

Reporting entities will receive an immediate notification of errors, if there are any, when they file electronically. The IRS’s Affordable Care Act Information Returns portal, called AIRS, automatically confirms submissions with a message such as:

• “Accepted”
• “Accepted with errors”
• “Rejected”

Employers who file electronically will be able to address errors immediately or begin the process of working with the IRS to understand their errors and how to resolve them. Having this feedback instantly will help employers avoid or eliminate ACA reporting penalties, which may be steep. As stated above, employers should also remember the Good Faith Transition Relief will no longer protect them from these steep penalties. (Employers will also avoid errors and ACA reporting penalties in 2022 by working with HR and payroll experts, such as MP. MP’s team of payroll and HR compliance experts help thousands of clients complete ACA reporting on time and error-free every year.)

2. ACA reporting is cleaner and faster when done electronically.

When completing ACA reporting, employers will benefit from the streamlined AIRS electronic system. The process will be quicker and simplified by the technology. Employers won’t have a desk full of physical forms and reports to keep track of during the process. It’s also important to note the electronic system safeguards employers. Sometimes the IRS or mail services will lose documents or process or copy them incorrectly. These errors are detrimental to employers, creating extra work at best, and higher penalties at worst. They may take a long time to resolve, and the resolution process may even be costly. When employers perform ACA reporting electronically, they avoid this possibility.

3. Employers gain proof of ACA submission immediately.

Electronic submission of ACA forms, including furnishing forms 1095-B, Form 1095-C, and Form 1094-C, will result in an automatic receipt ID for the employer. Employers will have this ID ready if they need to defend against IRS penalty assessments. Reporting entities should note if an organization erroneously receives an IRS Letter 5699 (which will suggest they haven’t met the ACA reporting deadline), they could immediately prove that the filing was submitted with the receipt ID.

4. Electronic filing offers a later due date for ACA reporting.

One of the most significant benefits of filing electronically is a due date one whole month after the paper filing deadline. (The electronic filing date is March 31 and the paper filing due date is February 28.) With this extra time, employers could:

• Review their ACA filing more thoroughly to ensure forms are error-free.
• Avoid penalties (some could be in the million-dollar range) by ensuring pristine submissions.
• Find and engage a vendor, such as MP, to take the burden of ACA reporting off the company’s plate.

5. Employee payroll data errors are quickly corrected.

Employers filing electronically will get an automated response (called a TIN validation error) if their filings have discrepancies in employee data, as compared to that in the Social Security Administration’s database. These discrepancies may include data that isn’t updated with:

• Employees’ name changes
• Employees’ changes of address
• Employees’ marital statuses

Correcting these errors won’t just help employers avoid steep IRS penalties. They’ll also assist an organization in correctly paying employees, filing their tax information, and even mailing them basic physical forms and documents.