Skip to main content

IRS Finalized Rules: How will they impact you?

Tuesday September 26th, 2023

Estimated time to read: 1 minute, 30 seconds


In late 2022 the IRS issued a final rule extending deadlines for furnishing ACA forms to employees and participants. Under the final rule, filing entities, employers or providers of coverage will receive an automatic 30-day extension on the deadline to provide the 1095 “B” or “C” forms to employees or former employees. The rule also confirmed the availability of an alternative method for furnishing forms. For years in which the penalty for the individual mandate remained at $0, employers would only be required, upon request, to provide forms to individuals covered on their plan.

Additionally, the IRS released a final rule regarding electronic filing for various information returns earlier this year. This final rule makes a significant change regarding which employers will be required to file their ACA 1095-B or 1095-C forms electronically. Previously, employers had a high threshold of 250 forms, and were able to dis-aggregate the counts for various returns such as W-2, 1099, 1095-B or 1095-C. That meant as long as they had fewer than 250 forms in each category, employers could file to the IRS on paper rather than electronically. With this final rule, the 250 form count has been reduced to 10 forms. Also, employers are required now to aggregate all of their form counts together (ex. W-2, 1099, 1095, etc.) to determine if they meet the threshold of 10 forms. Essentially, this means nearly every single employer required to file 1095-B or 1095-C forms will now be required to do so electronically.

So who is this likely to impact the most? 

Smaller Applicable Large Employers (ALE), that have been filing their forms on paper as well as non-ALE employers who sponsor a self-funded or level-funded health plan. For these smaller employers under 50 lives, many of their carriers and TPA’s have decided they will not file to the IRS on behalf of those employers, even if they create the forms and provide them to the employer. This means these employers will need to quickly find an electronic filing solution to prevent being penalized when they file their 2023 1095’s in 2024.

Penalties for failure to file 1095’s timely and accurately can range from $60 per form all the way up to $630 per form for willful disregard. Employers that have been filing via paper to the IRS should immediate determine what their filing responsibility will be for 2023 and make certain they have an electronic filing solution in place.

isolved is here to help and can offer solutions for employers looking to outsource their filing obligations. We are able to assist large and small employers alike.

Contact your local isolved Sales Account Executive for more information.