Every year applicable large employers (ALE), those fifty or more employees, and self-funded employers go through the process to code and complete the appropriate 1094 and 1095 forms for their health plan. But here are more actions that may be required besides coding the forms and sending them to the employee and the IRS.
If you file electronically, the IRS may reject a form that does not match their records. Normally those are name and social security number (SSN) mismatches. If you are fully insured, those are employee names and SSNs that are not matching. That can happen if we update our system when employees are married or divorced, but we do not request the social security card as proof of name change. A best practice for employers is to only update names when new social security cards are provided. That will help prevent those types of IRS rejections and the cost to refile them.
For self-funded employers, the error could be caused by the employee’s name and SSN mismatch or their covered dependent that is also being reported on. In the case of the dependent, if you are not able to obtain the correct SSN, you can refile a corrected form by using the date of birth instead.
If you are filing by paper, that response time for the IRS can take years before they request corrected information. That is why it is important to follow the three-year record-keeping requirement and save all the forms that are created in a safe place. Just in case you get the formal IRS letter needing additional details.
However, your business is required or not required to file the ACA 1094/1095 forms, it is important that the company have a system or vendor that will assist with correct code combinations and audit checks before filing. That way the IRS can review all your forms and put their stamp of approval on them and move on to the next company. If you are looking for a partner to assist you with IRS corrections or future filings, contact OmniaHR today.