Ten days before the deadline for electronic filing of 2015 Forms 1094-C and 1095-C, many employers are discovering that they contracted for less than all the needed services. Here’s what we’re seeing all too commonly.
Some vendors offered turnkey packages. They promised, in writing, to host or to manage your data, to use it to generate your Forms, to deliver timely Forms 1095-C to the 2015 employee recipients, and to upload the Forms to the IRS timely. Some even committed to make and upload required corrections. Typically, these vendors sold those comprehensive services as part of a broader deal to administer your payroll and/or your benefit plans. They committed to do lots of expensive development and preparation – e.g., acquiring an AIR system Transmitter Control Code (“TCC’), months in advance of knowing exactly what their associated costs and delivery schedules would be. Their prices typically reflected that risk. Those prices sent many employers in search of less costly options.
That spurred the market for software that enables employers to generate their own XML Forms. Some vendors bundled that software with a commitment to deliver the employer-generated Forms to employees and to upload the Forms to the AIR system. Some allowed customers to buy only the software license. Some vendors offered only the software license.
As the 2016 delivery and filing deadlines approached, employer options narrowed. Some vendors offering comprehensive services cut off sales months in advance of those deadlines, to assure the delivery of quality services in the first year of operation. In short, the less you bought, the later you could buy it. But too many employers waited too late and could buy only a software license. Those employers were able to generate and deliver 2015 Forms 1095-C to their 2015 full-time employees, avoiding the $250-per-Form fine for that failure, but there’s a separate $250-per-Form fine for failing to file timely with the AIR system. If the ALE Member has 250 or more 2015 Forms 1095-C to file, paper filing is not an option, and electronic filing requires an IRS-issued TCC. Getting the TCC requires application to the IRS and IRS approval based on passing a series of data and system integrity tests. Do you know what a “SOAP Envelope” is? If not, and maybe even if you do, you probably need a Plan B. There is no “EASY” button.
If this is your situation, you need to make a last minute AIR system transmitter deal with a reputable vendor, or you need to budget for the penalties. You can mitigate your penalty exposure by filing correctly, though late. If you don’t file at all, you’ll be exposed to the full penalty of $250 per Form 1095-C.
As of June 20, 2016, there are still a few AIR system Transmitters who will accept a few more 2015 upload-only customers. While you’re at it, ask if they will upload the required corrections for the quoted price. You’re likely to need to make loads of corrections.