Rejection Rate for ACA Forms Declines in 2017, IRS Says

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By Michael Trimarchi

A reduction in overall rejections and forms that were accepted with errors led to a smooth 2017 filing season for Affordable Care Act information returns, an Internal Revenue Service official said June 1.

John Kalinoski, who manages the development services team that is part of the IRS electronic-filing team, said the form rejection rate fell to 1 percent in 2017 from 4.5 percent in 2016. The number of information returns that were accepted with errors fell to 3.8 percent from 6 percent, he said during the monthly payroll industry teleconference.

Employers with at least 50 full-time equivalent employees in the previous year must file Forms 1095-C, Employer-Provided Health Insurance Offer and Coverage, and 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, through the ACA Information Returns (AIR) system. Forms filed through AIR may result in acceptance, acceptance with errors, or rejection of the forms. The deadline for filing the forms was March 2, 2017.

“The overall 2017 filing season has gone very smoothly,” Kalinoski said. “The same can be said for ACA AIR.”

Extensions in Shorter Filing Season

The 2017 filing season was three months, compared with six months in 2016, Kalinoski said. A critical difference was that no filing extensions were granted in 2016, he said. Employers that applied for an initial 30-day extension were granted the extra time, he said, adding that a second 30-day extension also was available.

“With both of them, it would lengthen the filing season to the end of May,” Kalinoski said of the extensions. Final filing totals have not been released by the Treasury Department, he said.

The availability of extensions likely led to a reduction in last-minute filings, Kalinoski said. “Clearly, with the uncertainty of what is to come next year, we can't say that what we just experienced will be indicative of next year,” he said.

Additionally, the IRS is to release ACA draft forms in July and draft instructions in August, similar to the 2016 schedule. Draft forms are not to be filed with the agency.

To contact the reporter on this story: Michael Trimarchi in Washington at mtrimarchi@bna.com. To contact the editor responsible for this story: Michael Baer at mbaer@bna.com.

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