As we discussed in a prior article, it is now more important than ever for employers to ensure they fully and accurately complete IRS Forms 1094-C and 1095-C — forms required to be filed and/or furnished to employees under the Affordable Care Act. A failure to do so can lead to eye-popping proposed employer shared responsibility payment (ESRP) assessments, as well as information reporting penalties.

To avoid such costly mistakes, employers should keep the following seven tips in mind when completing or reviewing Forms 1094-C and 1095-C:

Form 1094-C

1. Be very sure that the “Yes” box is checked on Line 23, column (a) to state that minimum essential coverage was offered for all 12 months.

This is far and away the single most important data entry on both forms. The box should always be checked for an employer who provides minimum essential health coverage to all full-time employees in accordance with the Affordable Care Act (ACA). Failing to check this box may result in an automatic ESRP assessment of up to $2,700 per full-time employee for 2021. The amount is adjusted annually.

2. Know when to check the box on Line 22 for “Qualifying Offer Method.”

If an employer is eligible to use the Qualifying Offer Method, it should check this box only if it is reporting offers of coverage on Forms 1095-C using code 1A.

Form 1095-C

3. Conduct a coding audit and know where to prioritize.

Each of the below tips and other points of review for Forms 1095-C should be addressed prior to the...

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