Affordable Care Act Compliance: Goodbye Good Faith Relief

affordable care act compliance

Though the Affordable Care Act (ACA) has endured much scrutiny and litigation over the years, the legislation remains largely intact, meaning Affordable Care Act compliance is a must for Applicable Large Employers (ALEs). In the past, the IRS provided ways for ALEs to avoid substantial penalties by offering relief for those who demonstrated a good faith effort to furnish and file complete forms with correct information. However, that relief has come to an end. Notice 2020-76 states that the 2020 reporting year is the final year this good faith relief will be offered. With increased risk for IRS penalty assessments, now is the time for ALEs to secure an ACA compliance partner to keep your organization fully compliant and penalty free.

Now that good faith relief is off the table after 2020, ALEs must know the risks of noncompliance. Failure-to-furnish and failure-to-file (or late filing) each carry penalties of $280 per return, and penalty amounts nearly double to $550 per return if noncompliance is found to be intentional. Let’s consider an employer who fits the minimum requirements to qualify as an ALE with 50 full-time employees. If this employer fails to furnish Forms 1095-C to those employees, they would see an IRS penalty assessment of $14,000. If the IRS finds that the ALE’s noncompliance is a result of intentional disregard, that amount would almost double $27,500! These penalties are completely avoidable if the ALE adopts stringent Affordable Care Act compliance practices. Unfortunately for many businesses, the processes surrounding ACA compliance can take up too much of their valuable time, and mistakes can still occur. That’s why employers who want to ensure ACA compliance choose to work with a trusted partner like BASIC.

BASIC simplifies the Affordable Care Act compliance process and offers businesses the peace of mind they need. We provide robust materials prepared by compliance experts including file-ready Form 1095 generation, automatic e-Filing to the IRS, optional ACA corrections transmittal, and mailing Form 1095-Cs directly to employees to simplify distribution. BASIC handles preparation of Forms 1094-C and 1095-C with e-Filing for employers of all sizes and complexity – we’ve furnished over 1,000,000 1095-C Forms since 2015! Our online ACA portal also provides a variety of training videos and materials employers can access at any time.

See why so many employers choose BASIC as their ACA compliance partner. Request a proposal today!

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