Remember those 1094 and 1095 documents companies had to complete and submit to the IRS at the beginning of 2016? Although the deadline to send in the forms has long passed, the process isn't entirely over for employers. Many businesses may have realized post-submission that their paperwork included errors of differing magnitude. The IRS will give penalties for late filing of forms and will do the same for not including all necessary information or submitting documents with false data. Let's take a closer look at how organizations can rectify their mistakes and avoid – or at least reduce – costly fines:

Breakdown of the errors
There are a number of ways 1094 and 1095 forms can be labeled as incorrect. Since these documents – specifically 1094-C and 1095-C – are completed by applicable large employers, it's crucial to fix the submissions as quickly as possible and send them directly to the IRS. It's important to note, however, that companies can adjust the forms for any open tax years for up to three years of the filing due date. Towers Watson and Willis details the types of mistakes that require correcting as the following:
For Form 1094-C:
- Full-time employee count.
- Name or employer identification number.
- Total number of 1095-C Forms filed.
- Certifications of eligibility.
- Whether ALE is member of aggregated ALE group.
- Whether correct box is checked for minimum essential coverage indicator.
- Whether aggregated group indicator box is checked.
- Whether correct indicator code is entered in 4980H transition relief column.
For Form 1095-C:
- Employee/enrollee name, employee/enrollee Social Security number.
- Details on the offer of coverage.
- Premium for self-only coverage for the lowest-cost option.
- Employer identification number.
- Affordability safe harbor and other relief codes.
- Information about covered individuals, including name, SSN and months of coverage.
Penalties may be waived
As previously stated, the IRS will hold companies accountable for documents that are late, don't include all required materials or are filed with incorrect information in the form of monetary fines. However, these penalties could be waived if employers can prove there was a reasonable cause for their mistake.
With that in mind, Triton Benefits has created a helpful chart to explain both previous and current reporting fees:
2015 ACA Reporting Penalties for ALE with Gross Rev > $5,000,000 | Previous Fine Per Form | Previous Max Penalty | Current Fine Per Form | Current Max Penalty |
Employer Intentionally Disregards ACA Reporting Req. | $250 | No Cap | $500 | No Cap |
Failure to File on Time | $100 | $1,500,000 | $250 | $3,000,000 |
Failure to File Correct & Complete Information | $100 | $1,500,000 | $250 | $3,000,000 |
2015 Reduced Penalties Of Corrected Returns Filed By Certain Dates | ||||
Corrections Filed Within 30 Days After the Required Filing Date | $30 | $250,000 | $50 | $500,000 |
Corrections Filed By August 1st, 2016 | $60 | $500,000 | $100 | $1,500,000 |
2015 ACA Reporting Penalties for ALE with Gross Rev < $5,000,000 | Previous Fine Per Form | Previous Max Penalty | Current Fine Per Form | Current Max Penalty |
Employer Intentionally Disregards ACA Reporting Req. | $250 | No Cap | $500 | No Cap |
Failure to File on Time | $100 | $500,000 | $250 | $1,000,000 |
Failure to File Correct & Complete Information | $100 | $500,000 | $250 | $1,000,000 |
2015 Reduced Penalties Of Corrected Returns Filed By Certain Dates | ||||
Corrections Filed Within 30 Days After the Required Filing Date | $30 | $75,000 | $50 | $175,000 |
Corrections Filed By August 1st, 2016 | $60 | $200,000 | $100 | $500,000 |
The IRS has offered short-term relief from penalties stemming from incorrect filing on 2015 documents as long as the employer submitted the documents on time and made a concerted effort follow federal regulations., according to the IRS
"Companies filing more than 250 forms had to do so electronically."
A quick "how-to"
Now that we've covered what errors require corrections and what the penalties for these errors are, it's critical for organizations to know how exactly to complete their fixed submissions.
Companies that submitted more than 250 forms were required to file them electronically. To correct an error on 1094-C, human resources teams should check the "corrected" box and refile the form with the IRS. Furthermore, they should not include any 1095 documentation.
To fix 1095-C errors, company leaders should submit a completely corrected 1095 document, along with a corresponding 1094-C form – which shouldn't have a checked "corrected" box and should have a completed Part I.
Lastly, if businesses need to correct both forms, they will need to complete two separate submissions. They can be combined in the same transmittal to the IRS, however.
With so many responsibilities to consider, companies may find it challenging to keep up with all of the ACA regulations they must comply with. From document submissions to subsidy notifications to form corrections, it all can become overwhelming. Triton Benefits offers employers helpful consultative services to ensure their adherence to state and federal rules is managed and costly penalties are avoided.