Employee Navigator ACA Filing: Troubleshooting IRS Errors Requiring Corrections

Your data was validated by both Employee Navigator and EN's e-filing partner, Nelco, to ensure that it matched the required formatting and minimum fields for form completion and submission to the IRS.  The IRS will further validate the information provided on the 1094 and 1095 forms including Tax Identification Numbers (TIN) that match the provided names for Responsible Individuals, Employees, and/or Covered Individuals (i.e. dependents).  Forms will be returned by the IRS if all information cannot be validated. 

How will I know if the IRS had an issue with the submission?

If the IRS identifies an issue with your 1094 or 1095 filing forms, the Company contact listed on the filing will receive an email from EN's E-filing partner, Nelco, with a Sender Name of "ACA Reporting Center" and a "[e-mail]" email address.  Users with access to the Nelco filing site will also see a message that corrections are required when checking the status (Form Filing History > Check Status).

Where do I view the forms requiring corrections or to make any corrections to the forms?

Any corrections to the forms must be completed with Nelco.  Admin users will NOT be able to correct the data in Employee Navigator and then re-transmit to Nelco. If data (example: SSNs) need to be updated in Employee Navigator, this needs to be completed in addition to the changes in Nelco.  

To access your forms:

• From Employee Navigator, navigate to ACA > 1094/1095 Reporting > Manage E-File Account > Enter E-file Site > Continue
• In Nelco, you will be brought to Your Filing Home
• Navigate to Form Filing History >  Make Corrections for the impacted forms

How do I make corrections?

Wrong 1095-B or 1095-C Information

If you have the wrong 1095 information, typically the IRS has flagged an issue with one or more of the following:

• Incorrect Employee
• Incorrect Employee Offer and Coverage
• Incorrect Covered Individuals

Steps to correct:  

• Select "Correct" or "View Correction Report"
• Validate that all information is correct for the employee and the covered dependents listed on the correction report
• Return to the "Forms in Progress" screen 
• Edit information as required 
• Submit the forms and complete the required information (Review Cart; Payment Details; Review & Confirm)

 Wrong Payer Information

 If you have the wrong payer information, typically the IRS has flagged an issue with one or more of the following:

• Incorrect Payer TIN
• Incorrect Payer Name
• Incorrect Payer Address

Steps to correct:  

• Select "Correct" or "View Correction Report"
• Validate that all information is correct for the payer
• Edit information as required 
• Submit the forms and complete the required information (Review Cart; Payment Details; Review & Confirm)

Wrong 1094 Information

 If you have the wrong 1094 information, typically the IRS has flagged an issue with one or more of the following:

• Incorrect Applicable Large Employer Member (ALE Member)
• Incorrect ALE Member Information
• Incorrect ALE Member Information - Monthly
• Incorrect Other ALE Members of Aggregated ALE Group

 

 Steps to Correct:

• Select "Correct" or "View Correction Report"
• Validate that all information is correct for the payer
• Edit information as required 
• Submit the forms and complete the required information (Review Cart; Payment Details; Review & Confirm)

What if the group found incorrect data and needs to update the 1095, but they aren’t IRS corrections?

You will need to make corrections in Nelco. Once the IRS has accepted the filing, you will see a corrections icon. Go to Form Filing History > Make corrections > Correct Wrong 1095 C. Selecting the correction type will push the forms to appear in Forms in Progress. You can view/edit the necessary forms and push them to submit payer to process the adjustments and pay for corrected forms.
Please note, the system will enforce IRS requested corrections are corrected prior to adjusting additional records or errors that have not been flagged by the IRS. Once the IRS requested changes have been submitted, you can reselect the ‘make corrections’ icon from form filing history which will prompt you to view 3 correction options, Wrong 1095 C, Wrong 1094, and Wrong Payer information. Then you can view/edit the necessary forms and push them to submit payer to process the adjustments and pay for corrected forms.

What is a “Correction Needed” or “TIN Validation Failed” message?

A “Correction Needed” or “TIN Validation Failed” message indicates that the IRS found an error with a Name/TIN combination used on a 1095 form for Responsible Individuals, Employees, and/or Covered Individuals (i.e. dependents). It is possible to receive multiple TIN validation error messages for the same form if multiple errors have been identified by the IRS. 

What is a TIN validation error?

A TIN validation error may indicate that the employee Name/TIN combination is incorrect, or that there is an incorrect Name/TIN combination in the Covered Individuals section, or both. If the Name/TIN combination is not correct for the employee, it is also not correct if they are listed in the Covered Individuals section.  You will also need to review and correct any covered dependents for that employee.

How do I correct a TIN validation error?

To correct a TIN validation error, follow these steps to update your data.  

1. Check your records (HR/Benefits, Payroll data) to verify that all Name/TIN were entered correctly.  
2. Contact the employee or employer to validate the Employee Name and TIN Combination (and corresponding Covered Individuals).  
   1. 1095-B Forms - Check with the sponsoring employer or responsible individual to validate the name/TIN information
   2. 1095-C Forms - Check with your employee to validate the name/TIN information
   3.  The SSA has tools to help you verify Social Security Number information.  The Social Security Number Verification Service may be of use to validate information.  
3. If the data reported to IRS matches the information from the responsible individual/employee, contact the IRS. 
4. If still not resolved, delete TINs for the Responsible Individual (1095-B) and Covered Individuals (1095-B & 1095-C) and enter the applicable Date(s) of Birth in the appropriate fields. The date of birth cannot be used for the employee listed on Form 1095-C.
5. Submit your corrected forms as soon as possible. 

What if I can’t resolve a TIN issue?

You may be unable to resolve a TIN issue if you can’t reach a particular employer or individual to validate their TIN or obtain their date of birth.  It is also possible that you have taken all required steps and believe that your data is accurate.  In these cases, make sure you have documented your process thoroughly to avoid potential fines and penalties.  The IRS has outlined the following process for 1095 forms:

• Make an initial solicitation of Recipient and Covered Individuals’ TINs at an individual’s first enrollment. 
• If you do not receive the TINs, make the second solicitation at a reasonable time thereafter.  
• If TINs are still not provided, make a third solicitation by December 31 of the year following the initial solicitation.  You are not required to solicit a TIN from an individual whose coverage is terminated.

 What is a Birthdate validation error?

The error: "The information return "CoveredIndividualname" and "BirthDt" within "CoveredIndividualGrp" must match the IRS Database" is a new message the IRS is using this year with 1095 forms. This message means that the IRS is saying that covered individual names and dates of birth are not matching their records. It is very similar to the TIN Validation Failed message users can receive with the name and TIN do not match the IRS records.

How do I correct a Birthdate validation error? 

The users would want to verify the covered individual names are spelled correctly and that the correct date of birth was used. If any mistakes are found, they can file a correction. If no mistakes are found, they could try using the covered individual's SSN instead of the birthdate. If all is correct, they could make note of everything they did to validate the information was correct and not file a correction.

What is the deadline to correct TIN Validation and Birthdate errors?

You should correct your forms as soon as possible but 2020 forms need to be filed before November 30th.

Additional Information About TIN Validation Errors:

To avoid potential fines/penalties, you should document your TIN solicitation process. For 1095 forms, the IRS has outlined the following process:  

• Make an initial solicitation of recipient and covered individuals’ TINs at the time of enrollment unless you already have the required TINs.  
• If you do not receive the TINs, the first annual solicitation is generally required by December 31 of the year in which enrollment with the recipient begins (January 31 of the following year if the enrollment begins in December).  
• Generally, if TINs are still not provided, a second solicitation is required by December 31 of the following year.  If TINs are still not provided, no further solicitation is required.  

What does the error "Federal Filing Rejected" mean? 

The IRS has indicated that they were unable to verify the Employer Identification Number (EIN) for this company. Typically we have found this to be an issue with the actual number provided (often numbers are transposed), but it may be an issue with the EIN matching the company name correctly. As a result of the IRS not being able to match this information, all of the files submitted for this company have failed and were not accepted by the IRS. Our recommendation (based on information from Nelco and from the IRS) is to confirm the correct EIN, make the necessary changes in EN's portal, re-transmit to Nelco, and refile. If the EIN is correct, your only recourse is to contact the IRS directly: contact the IRS. Unfortunately, Employee Navigator does not have a way to validate EINs. 

Is there a charge for corrected filings?

There is a charge per form for corrected filings that is the same price per form you paid originally.  You will be charged for any forms that need to be regenerated, both for printing/mailing and for e-filing the corrected forms.  For example, if the wrong payer information is listed, all 1095 forms need to be regenerated for both filings with the IRS and to print and mail the corrected forms to the employees.

I made the corrections in Nelco before the e-filing was completed with the IRS.  Do I still pay a charge for corrected forms?

Our e-filing partner, Nelco, will print and mail any employee 1095 forms within three (3) business days of the submission.  E-filing with the IRS (for those selecting it as part of the bundle or a la carte), will occur as a distinct process from the printing and mailing of forms to employees and as such, you will be charged for the printing/mailing of any corrected forms.   

 Instructions for ACA Penalties: Letter 226-J

For responding to the letter 226-J, Employee Navigator is not able to provide you with any more information than the process that needs to be followed when communicated with the IRS. Groups will receive letter 226-J to notify that employer that they are being penalized for not offering employees affordable MEC coverage. The high-level process is as follows: 

• IRS issues Letter 226-J to an ALE indicating that the ALE may be subject to the ESRP. The ALE must respond to Letter 226-J by the due date shown on the letter, which is generally 30 days from the date of Letter 226-J.
• The ALE must respond to IRS by completing Form 14764 ESRP Response indicating whether the ALE agrees/disagrees with the proposed penalty. (Form 14764 is included with Letter 226-J.)
•  If the ALE disagrees with the proposed penalty, the ALE must provide an explanation and indicate changes needed on Form 14765 Employee Premium Tax Credit (PTC) List, which is also included with Letter 226-J. The PTC list indicates by month the full-time employees who for at least one month were allowed a PTC and for whom the ALE did not qualify for a safe harbor or other relief. It also indicates the codes reported on Lines 14 and 16 for each employee on the list. Our recommendation here is to communicate to the IRS that the 1095 forms reflect that coverage was offered. We recommend pulling a report and identifying those ees and point to their 1095 forms as proof. We have specifically created the Affordability Details section on the employee 1095 form in Employee Navigator to help prove to the IRS that coverage was offered and that it was low cost. To review this information, click into the impacted employee’s 10195 form for the given reporting year, and scroll to the Affordability Details. We recommend printing out this entire page to send to the IRS.
• IRS will acknowledge the ALE's response by sending Letter 227.
• If the ALE disagrees with the proposed/revised ESRP, the ALE may request a pre-assessment conference with IRS, which must be requested in writing by the response date on Letter 227, which is generally 30 days from the date of Letter 227.
• If after correspondence between the ALE and IRS (or if the ALE does not respond to either Letter 226-J or 227), the IRS determines that an ALE is liable for an ESRP, the IRS will assess the amount of the proposed ESRP and issue Notice CP220J demanding payment.