What are the changes in 2021 ACA Reporting?
239 views | Last modified 1/6/2021 5:19:26 AM EST | Added by ACAwise Team

Every year, the IRS has been making changes in ACA reporting requirements for ALEs and all self-insured employers.

Again, this year, the IRS has made a few changes to the 2021 ACA Reporting requirements, for which the employers need to comply to avoid unwanted penalties from the IRS. 

  1. The IRS Mandates the “ICHRA Reporting

Effective from January 1, 2020, the ICHRA (Individual Coverage Health Reimbursement Arrangements) is an alternative option from traditional group benefits for employers of any size to offer health benefits to their employees. 

For 2021 ACA reporting, the IRS mandates the reporting of ICHRA on Form 1095-B/C to the employers who offered ICHRA to their employees during the tax year 2020. 

This helps the IRS determine the affordability of an ICHRA plan offered by the ALE complies with the “ACA employer mandate” under section 4980H.

2. Addition of “New ICHRA Reporting Codes” on Form 1095-B/C

In November, the IRS released final instructions of Form 1095-B and 1095-C, which clearly defined the mandate of ICHRA Reporting. 

To help employers report the offered ICHRA plan, The IRS added new ICHRA codes in the form 1095-B and 1095-C.

Form 1095-B 

IRS adds a new code (code G) on line 8 of Form 1095-B to report the ICHRA affordability on Form 1095-B to all self-insured small employers (with less than 50 full-time employees or full-time equivalent employees)

Form 1095-B

Form 1095-C 

Form 1095-C is generally used by ALE members to report to the IRS about the employee's health coverage information. 

Under the ACA employer mandate, Applicable Large Employers (ALE) must offer ICHRA to eligible employees that are affordable and provide minimum value. 

To figure out the offered ICHRA plan’s affordability, here are the new ICHRA codes added to Form 1095-C.

Form 1095-C

  • Additional codes (1L to 1S) in Code Series 1 in Line 14.
  • The section to enter the zip code in Line 17 
  • Section to enter the employee's age as of January 1 on Part-II.

3. Extension of  “Recipient Copy Distribution” Deadline

According to the 2021 ACA reporting requirements, the IRS has extended only the distribution of  ACA recipient copy deadlines, but the IRS filing deadline still remains the same. Below are the deadlines:

Electronic filing  Paper Filing Receipt copy Distribution
March 31, 2021 February 28, 2021 March 02, 2021 (from January 31, 2021)

Our ACAwise software has incorporated changes made for the 2021 ACA Reporting. So, if you’re looking for an expert ACA reporting solution provider to get started with your 2021 ACA reporting. You can contact ACAwise at (704)-954-8420 or email us at support@acawise.com; we will help you generate the ICHRA codes and e-file your ACA Forms with the IRS, State, and distribute the 1095 copies to your employees on-time.

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