ACA Reporting for Applicable Employers Begins This Year

A provision of the Affordable Care Act of 2010 (A.K.A Obamacare) affecting employers with 50 or more full-time employees goes into effect in 2015 and must be reported during the 2016 tax filing season. The IRS is requiring “applicable large employers” to report information on the health coverage they offered (or failed to offer) to full-time employees during the tax year. Affordable Care Act

Here are some important points to keep in mind regarding the upcoming reporting requirements:

  • Information must be reported to the IRS and each full-time employee, regardless of whether or not you offered your employees health coverage
  • The information reported will be used by the IRS to help determine whether an employer shared responsibility provision payment is applicable to your organization and whether or not your employees are eligible for a health insurance premium tax credit
  • The first information reports must be furnished to each employee no later than February 1, 2016 and to the IRS no later than February 28, 2016 (if you file manually) or March 31, 2016 (if you file electronically)
  • Even if you are an employer with less than 100 full-time employees that is eligible for transition relief from the employer shared responsibility provision, you are still required to comply with the information reporting requirements for 2015
  • If you are an employer that sponsors a self-insured employee group health plan, you must report information about all your employees (and their dependents) enrolled in the plan, even those who are not employed with your organization full-time
  • Applicable employers may be penalized for filing incorrect information and/or failing to report information to the IRS or to required employees in a timely manner; penalties imposed may be up to $250 per information return up to a maximum of $1,500,000

Forms to Use for Filing

There are two new forms applicable employers must use to report information to the IRS; Form 1095-C and Form 1094-C. A Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) must be completed on each applicable employee and sent to the employee by February 1, 2016. Form 1094-C is used to summarize the employer health insurance information and transmit all individual Forms 1095-C to the IRS. These forms are due to the IRS by February 28, 2016 or March 31, 2016, depending on if you file manually or electronically. Firms with 250 or more Forms 1095-C must file electronically, unless they receive a hardship waiver.

If you are an employer that is affected by the upcoming health insurance information reporting requirements, it is important to begin organizing sooner rather than later. Speak with your tax professional about what information will be needed and how to best prepare to accurately comply with these requirements.

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