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The call that lands on a Tuesday afternoon is rarely about Form 8928 by name. A controller mentions a COBRA election notice that went out late, or a benefits manager realizes one branch's HSA contributions ran lower than every comparable employee. By Wednesday the question is whether the failure is unintentional and which part of the form the math belongs in.
Form 8928 is the chapter 43 excise tax return for group health plan failures under IRC sections 4980B, 4980D, 4980E, and 4980G. The 4980B per-day tax is $100, or $200 when two or more qualified beneficiaries are hit by the same event, while 4980E and 4980G impose a flat 35% on annual employer contributions. A well-supported reasonable-cause statement can reduce the tax, with the 10% medical-care cap and $500,000 statutory cap applying only to failures due to reasonable cause.
Key Takeaways
- Form 8928 is how you report and pay certain excise taxes for group health plan failures under IRC §§ 4980B, 4980D, 4980E, and 4980G.
- Due dates depend on the section, and they are not all the same. For 4980B/4980D, the general rule is to file by the due date of the liable person’s federal income tax return, however for multiemployer or multiple employer plans, the due date is the last day of the seventh month after the plan year ends. For 4980E/4980G, file by the 15th day of the fourth month after the calendar year.
- You, the employer, plan sponsor, or designated plan administrator, file the return, depending on who is liable for the failure.
- A concise, well‑supported reasonable‑cause statement can reduce or eliminate the excise tax when facts support it (note the 10% medical-care cap and $500,000 statutory cap apply only to failures due to reasonable cause and not willful neglect – willful-neglect failures flow through uncapped).
- As of August 27, 2025, the IRS page for Form 8928 lists “Recent Developments: None at this time.” Always check before filing.
What Form 8928 Covers, in One View
Form 8928 is the IRS’s catchall return for certain group health plan compliance failures in Chapter 43. It spans four areas:
- Section 4980B, COBRA, failures to offer or administer continuation coverage correctly.
- Section 4980D, HIPAA/ACA market reforms, things like lifetime limits, rescissions, dependent to age 26, appeals, and patient protections.
- Section 4980E, Archer MSA comparable contributions, parity rules within employee classes.
- Section 4980G, HSA comparable contributions, same idea for HSAs, with annual testing.
To keep you oriented while you prep the return, here is a clean map between failures and the form:
| Code section | What failed | Where on Form 8928 |
| 4980B | COBRA continuation rules | Part I |
| 4980D | HIPAA/ACA market reform rules | Part II |
| 4980E | Archer MSA comparability | Part III |
| 4980G | HSA comparability | Part IV |
| – | Total tax and payment | Part V |
Note the internal structure on the form, Parts I and II each have a Section A and Section B to separate failures due to reasonable cause versus willful neglect. That matters for how you compute the excise tax and request relief.
Who Must File, and When
Who files
- If there is a designated plan administrator, that party typically files for COBRA. If not, the employer or plan sponsor files.
- For 4980D market reform failures, the liable employer/plan sponsor files.
- For 4980E and 4980G comparable contribution failures, the employer files.
Due dates you can trust
- 4980B/4980D, file by the due date of the liable person’s federal income tax return, for multiemployer or multiple employer plans, file by the last day of the seventh month after the plan year ends.
- 4980E/4980G, file by the 15th day of the fourth month after the calendar year of the failure, for a calendar year 2024 failure, that is April 15, 2025.
If you need more time to file, you can request an extension on Form 7004, however, extensions do not extend the time to pay tax.
Why Employers End Up Here
From what I see across finance and HR teams, two patterns trigger most Form 8928 filings:
- COBRA coverage lapses. A qualifying event occurs, notices go out late, or the coverage window is cut short by mistake.
- Noncomparable HSA or Archer MSA contributions. Funding varies by class or coverage tier in a way the rules do not allow, so parity breaks.
Both are understandable in busy cycles, and both are fixable with clean documentation, a prompt correction within the 30-day correction period (which runs from the first date any responsible person knew or should have known of the failure, not from when the IRS notices it), and, when the facts support it, a reasonable‑cause narrative.
Section 4980B, COBRA Failures Without the Headaches
COBRA is familiar, the excise tax rules are often not. Under 4980B, the excise tax is computed per affected beneficiary per day for the noncompliance period (the base rate is $100 per qualified beneficiary per day, but it jumps to $200 per day when two or more qualified beneficiaries are affected by the same qualifying event), and Form 8928 Part I walks you through that math. The form also separates failures where you can credibly assert reasonable cause from those you cannot.
A field checklist you can use today
- Map the timeline, date of the qualifying event, the notice due date, the date the notice actually went out, the election window, coverage start and end dates.
- Fix the coverage, reinstate or extend as required, and document the fix.
- Compute the days, only include the portion of the noncompliance period in the applicable plan or tax year for that filing.
- Assemble evidence, notices, mail proofs, emails, administrator logs.
- Draft reasonable cause, if the facts support it, set out what happened, what you did, and how you will prevent a repeat.
The instructions even clarify that the noncompliance period may span more than one plan or tax year, you report only the portion that belongs in the period you are filing.
Common COBRA pitfalls
- Misclassifying a divorce or Medicare entitlement and missing the notice window.
- Cutting short the maximum coverage period because of a carrier system setting.
- Assuming a vendor corrected a failure without verifying the effective date on the file.
Pro tip, write “Summary Form” at the top when you attach multiple detail pages and roll totals to a single summary return, exactly as the instructions describe.
Section 4980D, HIPAA and ACA Market Reform Failures
Section 4980D reaches portability, access, renewability, and the ACA market reforms that have been in place for years, including no lifetime limits, no rescissions, dependent coverage to age 26, and appeals and patient protections. Failures are reported in Part II of Form 8928.
Small insured plan exception
If you are a small employer providing health coverage solely through a contract with a health insurance issuer, you are not liable for the 4980D excise tax for certain failures that are solely the issuer’s fault, except as noted in the rules. The instructions outline that narrow exception, and you should document why it applies before relying on it.
Due date and extension, with receipts
- For most filers, the 4980D due date follows the due date of the liable person’s federal income tax return.
- For multiemployer or multiple employer plans, it is the last day of the seventh month after the plan year ends.
- If you need more time, use Form 7004 for an automatic extension to file, not to pay.
Reasonable cause that actually works
Reasonable cause should be factual, brief, and supported. The IRS cares about causal facts, your behavior after discovery, and your prevention plan, not generic apologies. Keep a dated trail of what happened, when you found it, who fixed it, and how you changed your controls.
“Reasonable cause” is about what a reasonable, well‑run employer would have done. If your story shows diligence, prompt correction, and prevention, say it plainly.
Aligning People, Process, and Tools
A lot of Form 8928 pain is avoidable with simple operating discipline:
- SOPs for COBRA and HSA/MSA, who does what and when, by calendar.
- Structured workpapers, a consistent file name pattern and version control, so reviewers can sign off fast.
- Layered review, preparer to senior to a quality check, then final sign‑off.
- Live tracking, a shared tracker for qualifying events, contribution tests, and filing status.
If your in‑house team is swamped during peak season, a structured offshore delivery layer can help, but only if it plugs into your SOPs, your templates, and your review logic. That is the difference between stability and chaos.
Light mention for context, Accountably integrates trained offshore teams inside U.S. firm workflows with SOP‑driven workpapers, layered review, and turnaround SLAs when firms need production capacity without giving up control. Use it when your in‑house reviewers are stuck in loops and deadlines are at risk.
Sections 4980E and 4980G, Comparable Contribution Rules
Comparable contribution failures are the other big driver of Form 8928 filings. The idea is simple, within a designated class of employees and coverage tiers, your contributions must be comparable.
- 4980E, Archer MSAs. Same amount, or same percentage of the annual deductible, for comparable employees within the class. Report in Part III (the 35% excise tax applies to the aggregate annual MSA contribution pool, not just the noncomparable shortfall, so a small comparability miss can trigger 35% of the whole pot).
- 4980G, HSAs. Same concept for HSAs, tested over the calendar year and reported in Part IV (like 4980E, the 35% tax falls on the aggregate annual HSA contribution amount, not the differential between what was contributed and what comparability required).
Define classes first, then test
- Define the classes you will use, for example full time vs part time, location, bargaining status, or job category, and the coverage tiers, self‑only vs family.
- Pick a contribution method, a fixed dollar amount or a fixed percentage of the annual deductible.
- Test every eligible employee in that class and tier. Keep a schedule that shows the class, the tier, the contribution, and the date funded.
Testing period and deadline
- Testing period is the employer’s calendar year, January 1 through December 31.
- Deadline to file Form 8928 for 4980E/4980G failures is the 15th day of the fourth month after that calendar year, for 2024, that is April 15, 2025.
Penalties and interest
If you miss the due date, the IRS applies a late filing penalty of 5% per month up to 25%, plus interest on unpaid amounts, and a separate late payment penalty of 0.5% per month up to 25%, unless you establish reasonable cause. These are in the instructions and accrue from the original due date.
Reasonable Cause, How to Write It So It Helps
Here is a simple structure you can adapt. Keep it to one or two pages, attach exhibits, and date everything.
- Facts. What failed, who was affected, and the precise dates.
- Causation. What caused the failure, for example system conversion, natural disaster, or documented erroneous advice.
- Correction. What you did and when, reinstatement, backdated contributions, carrier confirmations.
- Controls. How you changed your process so it does not happen again.
- Relief requested. A clear sentence that you are requesting penalty relief for reasonable cause under the applicable section.
Attach the reasonable‑cause statement to Form 8928 and keep the evidence with your workpapers. That one attachment often changes the entire outcome.
Due Dates, Periods, and Filers, at a Glance
| Code section | What it covers | Period tested | General due date | Special rule | Primary filer |
| 4980B | COBRA continuation | Plan or tax year, see period rules | Due date of liable person’s federal return | Multiemployer or multiple employer plans, last day of the 7th month after plan year end | Designated administrator, else employer/plan sponsor |
| 4980D | HIPAA/ACA market reforms | Plan or tax year, see period rules | Due date of liable person’s federal return | Multiemployer or multiple employer plans, last day of the 7th month after plan year end | Employer/plan sponsor |
| 4980E | Archer MSA comparability | Calendar year | 15th day of the 4th month after the calendar year | – | Employer |
| 4980G | HSA comparability | Calendar year | 15th day of the 4th month after the calendar year | – | Employer |
Source for due dates and roles, IRS instructions for Form 8928 and the IRS Form 8928 page. Always check the current IRS page before filing.
How to Complete and Send Form 8928
- Part I, COBRA failures, and, when needed, multiple detail pages with a “Summary Form” on top.
- Part II, HIPAA/ACA failures, again split between Section A, reasonable cause, and Section B, other failures.
- Part III and Part IV, Archer MSA and HSA comparable contribution failures.
- Part V, total tax due and payment instructions.
Where to send it, the instructions list the IRS processing address and note the use of designated private delivery services for timely filing. Check the current IRS page for any address change before mailing.
Payments, interest, and penalties
- Pay with the return by the statutory due date that applies to your section.
- Interest starts from the original due date.
- Late filing and late payment penalties apply unless you show reasonable cause. The instructions include the penalty rates. Keep that citation handy in your file copy.
Amended returns, refunds, and credits
If you need to correct a previously filed Form 8928, file a new form marked “Amended Return” at the top and attach a clear explanation. If tax increases, pay with the amended return to stop interest. If tax decreases, attach the documentation that supports the reduction and follow the refund claim time limits. The IRS Internal Revenue Manual also details how amended 8928s route inside the Service.
Resources and Freshness Check
Always pull the current About Form 8928 page and the Instructions for Form 8928 before you finalize the return. As of August 27, 2025, the IRS shows Recent Developments: None at this time for this form, however, you should still confirm the page on the day you file.
- About Form 8928 and “Recent Developments.”
- Instructions for Form 8928, due dates, penalties, summary form mechanics.
FAQ, Short and Straight
What is Form 8928?
Form 8928 is the IRS return used to report and pay excise taxes when a group health plan fails specific rules under IRC §§ 4980B, 4980D, 4980E, or 4980G. Think COBRA mistakes, market reform violations, or noncomparable HSA/MSA contributions. You compute the tax in the relevant part and attach a reasonable‑cause statement when appropriate.
What is Form 8948 used for?
Form 8948 is unrelated to Form 8928. It is used by e‑file providers to explain why they are not e‑filing certain returns, or to request relief in specific scenarios, and it is not a vehicle to fix group health plan failures. Include it here only to avoid mixing it up with 8928 during filing season.
Who needs to file Form 8938?
Form 8938, Statement of Specified Foreign Financial Assets, is an individual and certain entity disclosure form for foreign assets. It has nothing to do with group health plan excise taxes, but it is commonly confused because of the similar numbering.
Is there an IRS form to cancel all debt?
No. If a creditor forgives debt, they typically issue Form 1099‑C, and you analyze exclusions using Publication 4681. This is separate from Form 8928 and group health plan excise taxes.
A Light Operational Note for Firms That Need It
If your team is buried in review loops or peak‑season spikes, you can add capacity without losing control by tightening SOPs, standardizing workpapers, and adding a structured team that works in your systems. Accountably provides that kind of U.S.‑led offshore delivery for CPA and EA firms, focusing on SOP‑driven execution, multilayer review, and predictable turnaround windows. Use help like this when deadlines are drifting and you need review protection, not resumes.
Final Word
Disciplined compliance is the cheapest insurance you can buy. Identify the failure, correct it quickly, compute the excise tax in the right part of Form 8928, and attach a reasonable‑cause statement if the facts support it. Check the IRS page for any updates, file and pay on time, and keep tight workpapers so a reviewer can sign off in minutes, not hours. That is how you protect your plan, your people, and your brand, without losing another Friday night to a preventable scramble.
Common Mistakes We See Every Season
The same six errors land on review every year. They share a root cause: writers and DIY filers treat Form 8928 as a single excise return when it is actually four distinct chapter 43 taxes stitched onto one form.
Reusable Checklists
The three checklists below are written as paste-ready SOPs for any team that handles chapter 43 excise filings. Workflow runs from failure discovery through Part-by-Part computation and reasonable-cause documentation, citing the Form 8928 instructions and IRC sections directly.
Failure discovery and triage
- Capture the discovery date, source (HR audit, plan administrator, employee complaint), and IRC section breached.
- Confirm the 30-day correction window start date – the first day the responsible person knew or should have known of the failure, per IRC 4980B(f)(8) and 4980D guidance.
- Identify which Part of Form 8928 applies: Part I for 4980B, Part II for 4980D, Part III for 4980E, Part IV for 4980G.
- Document whether the failure is reasonable cause or willful neglect, with separate evidence files for each.
- Count qualified beneficiaries (4980B) or affected individuals (4980D); per-day count starts at the first day of noncompliance.
- Flag whether the filer is a single-employer plan, multiemployer plan, or TPA / HMO / insurer (drives the cap rule on line 11).
- Open the Form 8928 worksheet and lock the plan year ending date in header item F.
Part I (section 4980B / COBRA) computation
- Line 1: total days of noncompliance in the reporting period for the reasonable-cause computation.
- Line 2: number of qualified beneficiaries affected by the qualifying event (drives the $100 vs $200 per-day rate on line 3).
- Line 4: enter -0- only if the failure was undiscoverable through reasonable diligence OR corrected within the 30-day window AND due to reasonable cause; otherwise carry line 3 to line 6.
- Line 5: examination-period floor – $2,500 per qualified beneficiary, stepping up to $15,000 to the extent violations were more than de minimis (zero if corrected before exam notice).
- Line 6: smaller of line 3 or line 5.
- Line 7: aggregate line 6 across multiple qualifying events onto the summary form.
- Lines 8-10: medical-cost cap – preceding tax year for a single-employer plan, current tax year for a multiemployer plan; apply the $500,000 statutory cap on line 10.
- Line 11: smallest of lines 7, 9, or 10 (TPAs, HMOs, and insurers also apply the $2 million all-plans cap).
- Lines 12-15: willful-neglect computation, uncapped, flows directly to the summary.
- Line 16: total tax due under section 4980B – add lines 11 and 15.
Reasonable cause statement and final review
- Describe the failure in plain language with discovery date, root cause, and remediation steps.
- Document the reasonable diligence standard met – preventive controls, periodic reviews, and vendor SLAs.
- Show the 30-day correction window math: failure date, discovery date, and correction completion date.
- Distinguish reasonable cause from willful neglect with named decision-makers and timeline.
- Attach plan administrator notices, COBRA election letters, or HSA contribution records as exhibits.
- Reconcile aggregate medical-care expenses for line 9 (or line 26) against the prior-year general ledger.
- Confirm Form 7004 extension status – tax paid with Form 7004 reports on line 40, not line 41.
- Cross-foot line 39 against lines 16, 34, 36, and 38 before signature.
- Sign under penalties of perjury and route paid-preparer signature separately.
- Paper-file to Department of the Treasury, Internal Revenue Service, Ogden, UT 84201-0027, per the current Form 8928 instructions.
Keep 8928 Season From Stalling
Form 8928 is not a seasonal filing. Failures land mid-quarter, mid-audit, or the day a benefits manager flags an HSA comparability gap. The penalty math compounds quickly once that discovery date passes the 30-day correction window, and the IRC 6651 failure-to-file penalty stacks on at 5% per month up to a 25% cap, with a minimum penalty of roughly $510 for returns more than 60 days late (per the 2025 inflation-adjusted Rev. Proc. cited in the Form 8928 instructions).
The teams that handle this cleanly treat 8928 as a controlled workflow, not a one-off scramble. Discovery triggers a same-week intake; the IRC section, filer type, and reasonable-cause posture get assigned before anyone touches a Part. That single discipline shortens the path from discovery to filed return by weeks.
- Tag every reported failure with its IRC section (4980B, 4980D, 4980E, or 4980G) and due-date rule on intake, so 4980B and 4980D returns route to the filer's income-tax-return due-date queue and 4980E and 4980G returns route to the April 15 calendar-year queue.
- Build a single-source workpaper that locks line 3 (per-day rate), line 5 (examination-period floor), and line 9 (10% medical-care cap) on separate tabs, so reviewers can see which cap is binding without rerunning the math.
- Maintain a reasonable-cause exhibit library by plan – preventive control descriptions, vendor SLA evidence, and prior corrective actions – so the cause statement is assembled from pre-approved language, not drafted under deadline.
- Track each filing against the Form 7004 calendar: Form 7004 buys a 6-month extension to file, never to pay, and the tax estimate paid with the extension reports on Form 8928 line 40.
- Separate reasonable-cause and willful-neglect computations into parallel worksheets so the $500,000 statutory cap, the 10% medical-care cap, and (for TPAs, HMOs, and insurers) the $2 million all-plans cap are applied only where the rules allow.
Accountably's tax execution teams build that workflow inside firm and in-house benefits shops – intake checklist, per-event worksheets, layered review, and signed reasonable-cause exhibits, so the return that lands on the partner's desk is ready to sign rather than ready to start.
FAQs
What is Form 8928?
Form 8928 is the IRS return used to report and pay excise taxes when a group health plan fails specific rules under IRC §§ 4980B, 4980D, 4980E, or 4980G. Think COBRA mistakes, market reform violations, or noncomparable HSA/MSA contributions. You compute the tax in the relevant part and attach a reasonable‑cause statement when appropriate.
What is Form 8948 used for?
Form 8948 is unrelated to Form 8928. It is used by e‑file providers to explain why they are not e‑filing certain returns, or to request relief in specific scenarios, and it is not a vehicle to fix group health plan failures. Include it here only to avoid mixing it up with 8928 during filing season.
Who needs to file Form 8938?
Form 8938, Statement of Specified Foreign Financial Assets, is an individual and certain entity disclosure form for foreign assets. It has nothing to do with group health plan excise taxes, but it is commonly confused because of the similar numbering.
Is there an IRS form to cancel all debt?
No. If a creditor forgives debt, they typically issue Form 1099‑C, and you analyze exclusions using Publication 4681. This is separate from Form 8928 and group health plan excise taxes.