The IRS released the final forms and instructions for 2020 ACA reporting during the week of October 12th and there were no modifications made to provide some relief to employer reporting in light of economic hardship generated by COVID-19.
Please join us as Stacy Barrow, Esq. reviews the impact of COVID on 2020 ACA Reporting.
- Many employers were forced to make significant business changes due to the economic hardship encountered because of the pandemic including: terminations/layoffs, unpaid leave or furloughs and pay reductions, etc.
- These business decisions and how they were implemented may have impacted an Applicable Large Employer’s affordability calculation for 2020.
Applicable Large Employers (ALE’s) who historically applied the W-2 or Rate of Pay Safe Harbors may find that their offers of coverage are no longer affordable or that the ALE is not able to apply a Safe Harbor such as Rate of Pay that does not allow for salary reductions as one of its Safe Harbor requirements.
Also, ALE’s who transitioned furloughed full-time employees to COBRA will likely find that COBRA rates were not affordable.
Applicable Large Employers should consider reviewing their affordability calculations to see if they have penalty exposure risks.