Employers and health coverage providers must navigate complex IRS requirements to maintain compliance with the Affordable Care Act (ACA).
One critical component of this process is Form 1094-B, a transmittal document that accompanies Form 1095-B when reporting health coverage information to the IRS.
This form is essential for businesses and organizations that provide minimum essential coverage to employees or individuals. Understanding its purpose and filing requirements is key to ensuring accurate reporting and avoiding penalties.
Who Needs to File Form 1094-B?
Form 1094-B is primarily used by organizations that are not considered Applicable Large Employers, also known as non-ALEs.
Small employers that provide self-insured health coverage, health insurance companies that offer minimum essential coverage, and government entities administering Medicaid or Medicare must submit this form to the IRS.
Religious organizations and nonprofits that provide health insurance must also comply with this requirement.
Businesses that fail to file Form 1094-B when required may face penalties from the IRS. Understanding the filing criteria and deadlines is critical for avoiding unnecessary fines and ensuring compliance.
Key Differences Between Form 1094-B and 1094-C
Employers sometimes confuse Form 1094-B with Form 1094-C, but these forms serve different purposes.
Form 1094-B is used by non-ALEs and health insurance providers to report minimum essential coverage, while Form 1094-C is required for Applicable Large Employers with 50 or more full-time equivalent employees.
Form 1094-C is also used to demonstrate compliance with the employer mandate under the ACA, whereas Form 1094-B is simply a transmittal document. Employers should determine which form applies to them to avoid mistakes in ACA reporting.
Sections of Form 1094-B Explained
Form 1094-B consists of several key sections, each serving an important role in IRS reporting.
The first section requires basic information about the employer or health coverage provider, including the entity’s name, address, and EIN.
The second section provides transmittal details, including the total number of accompanying 1095-B forms being submitted. The third section identifies the contact person responsible for handling IRS inquiries.
Finally, the last section includes the signature and attestation, confirming that all submitted information is accurate.
Although Form 1094-B is relatively straightforward, errors can lead to compliance issues. Employers and health coverage providers should carefully review each section before submitting their forms.
How Form 1094-B Works with Form 1095-B
Form 1094-B and Form 1095-B work together to ensure the IRS receives complete health coverage information.
Form 1095-B provides details about the individuals covered under a health plan, while Form 1094-B serves as a transmittal document summarizing the submission.
Both forms must be filed together to comply with IRS requirements.
Inconsistent or incomplete submissions can create problems during the filing process. Ensuring that Form 1095-B data aligns with Form 1094-B is essential for accurate ACA reporting.
Filing Deadlines and Requirements for Form 1094-B
Organizations required to file Form 1094-B must adhere to IRS deadlines to avoid penalties.
The deadline for providing 1095-B forms to recipients is March 1, 2025, for the 2024 tax year. If filing by paper, the IRS submission deadline is February 28, 2025, while electronic filers have until March 31, 2025.
Employers and coverage providers submitting 250 or more forms must file electronically.
Late or incorrect submissions can result in IRS penalties, so it is important to prepare filings well in advance of the deadline.
Common Challenges Employers Face When Filing
Employers often encounter difficulties when filing Form 1094-B. Managing large data sets, understanding ACA regulations, and ensuring timely submission can be challenging.
Errors in reporting can lead to IRS penalties, and correcting mistakes after submission requires additional effort.
One of the biggest challenges is maintaining accurate employee health coverage records. Incomplete or inconsistent data can delay the filing process and increase the risk of compliance issues.
Employers should also stay informed about changing IRS regulations to avoid reporting errors.
The Importance of Accuracy When Filing Form 1094-B
Ensuring accuracy when completing Form 1094-B is critical for avoiding compliance issues with the IRS. Even minor errors, such as incorrect EINs or mismatched coverage details, can lead to IRS rejections or penalties.
Employers and coverage providers must carefully verify all data before submission.
One common mistake occurs when the number of accompanying 1095-B forms does not match the total reported on Form 1094-B. Inconsistencies like this can delay processing and create unnecessary complications.
Employers should also confirm that all reported health coverage information is consistent with internal records to prevent discrepancies.
Using a reliable filing solution can help reduce the risk of errors. Automated validation tools ensure that data is complete and formatted correctly before submission, minimizing the chances of rejection by the IRS.
Potential Penalties for Non-Compliance
Failing to file Form 1094-B on time or submitting incorrect information can result in IRS penalties. The penalties for late or incorrect filings increase each year, making it essential to comply with ACA reporting requirements.
Organizations that fail to provide 1095-B forms to covered individuals by the deadline may also face additional fines.
If errors are discovered after submission, employers must correct and resubmit the affected forms. The correction process can be time-consuming, especially for businesses handling a large volume of employee data.
Staying proactive and ensuring accuracy from the beginning can help organizations avoid unnecessary penalties and administrative burdens.
How to Amend Form 1094-B if Errors Are Found
If an employer or coverage provider realizes that Form 1094-B was filed with incorrect information, they must submit an amended form to the IRS.
The correction process involves identifying the errors, completing a new Form 1094-B with the correct information, and submitting it following IRS guidelines.
Employers should also review any accompanying 1095-B forms to ensure consistency. If errors are present in those forms as well, corrected versions must be issued to individuals and refiled with the IRS.
Handling amendments can be complicated, which is why many organizations choose to use professional filing services. Platforms like 1095EZ Online provide tools for making corrections efficiently, reducing the risk of further errors.
Why Employers Should Prepare Early for ACA Reporting
Waiting until the last minute to file Form 1094-B can lead to unnecessary stress and mistakes.
Gathering employee data, verifying health coverage records, and ensuring compliance with IRS regulations take time. Employers should start preparing well in advance to avoid last-minute complications.
Early preparation allows businesses to identify and resolve potential issues before the filing deadline. Reviewing employee records for accuracy and confirming that all necessary data is available can streamline the process.
Organizations that plan ahead also have more flexibility in handling unexpected challenges, such as system errors or missing information.
By using an automated ACA compliance solution, businesses can simplify the process and ensure that their filings are completed accurately and on time.
How 1095EZ Online Ensures Accurate and Timely Filing
1095EZ Online offers a solution for employers and health coverage providers looking to simplify ACA compliance reporting.
Our platform is designed to work independently of back-office software, making it compatible with any business setup.
By automating data management and validation, 1095EZ Online helps businesses reduce errors and streamline the filing process.
The platform efficiently handles bulk filings, ensuring that large-scale submissions are completed accurately and on time. It also provides IRS-approved electronic filing, eliminating the hassle of paper submissions.
Businesses benefit from expert support and compliance assistance, reducing the risk of errors and penalties.
By using 1095EZ Online, employers and coverage providers can simplify ACA reporting, save time, and ensure compliance with IRS regulations.
Ready to Get Started?
Form 1094-B plays a vital role in ACA compliance, serving as the transmittal form for 1095-B submissions. Understanding its purpose and filing requirements is crucial for non-ALE employers and health coverage providers.
Organizations must ensure that their forms are submitted accurately and on time to avoid penalties.
Businesses looking for a streamlined approach to ACA reporting can benefit from using 1095EZ Online. Our solution simplifies the filing process, reduces compliance risks, and helps employers stay ahead of IRS deadlines.