Affordable Care ActReporting Requirements
Q: What is the purpose of these forms?
A: Beginning in 2014, most Americans were required to obtain minimum essential coverage or pay a penalty (known as the "individual mandate"). These forms will assist the IRS in identifying which individuals were offered or had coverage through their respective employers.
Additionally, the information provided on these reports will be used to determine if an Applicable Large Employer member will be subject to the employer mandate penalty, and if an individual is eligible for a premium tax credit. Applicable Large Employers are generally employers that, together with other employers in their controlled group, employed 50 or more full-time and full-time equivalent (FTE) employees in the prior calendar year.
Q: Are all employers subject to the reporting requirement?
A: No. Employers with fewer than 50 full-time and full-time equivalent (FTE) employees that do not offer health coverage, are not subject to the reporting requirements.
Additionally, Employers with fewer than 50 full-time and fill-time equivalent (FTE) employees that offer fully insured health coverage are not subject to the reporting requirements; their insurance carrier is responsible for reporting. Employers with 50 or more full-time and FTE employees must complete and file Forms 1095-C and 1094-C, regardless of the type of coverage they provide.
Q: What is a full-time equivalent (FTE) employee?
A: Full-Time Equivalent employees are calculated by adding all the hours worked by part-time employees (those working less than 30 hours per week) in a month and dividing by 120.
Q: I am a small employer, but offer health benefits. Do I have to report?
A: It depends. If you offer fully insured coverage, the insurer is responsible for reporting. If you are a non-Applicable Large Employer member and you are self-insured, you will need to complete Forms 1095-B and 1094-B.
Q: Is this the first year these reports are required? When are they due?
A: The 2015 calendar year is the first year for which these reports are required. Originally, employers were required to provide the forms to their employees by February 1, 2016 and file them with the IRS by February 29, 2016 (or March 31, 2016 if filing electronically). However, in December 2015, the IRS extended these deadlines. For the 2015 calendar year only, employers have until March 31, 2016 to provide the forms to their employees and until May 31, 2016 (or June 30, 2016, if filed electronically) to file the forms with the IRS. In subsequent years, the forms must be filed with the IRS by February 28 (or March 31 if filed electronically) and provided to your employees by January 31.
Q: What information do I need to gather for the forms?
A: Among other things, you will report information such as:
- The name, address and Social Security Number of all full-time employees;
- The name, address and Social Security Number of all individuals (employees, spouses, dependents and others) who are covered under your group health plan;
- For each month, whether coverage was offered and to whom it was offered;
- The employee’s share of the monthly premium for the lowest cost self-only coverage;
- The months during which the individual had at least one day of coverage.
Q: What is a Controlled Group?
A: A Controlled Group is two or more entities treated as a single employer under section 414(b), (c), (m), or (o) of the Internal Revenue Code.
Q: What is the penalty if you do not complete the filing requirement?
A: You may be subject to a penalty up to $250 per form ($500 if both the form furnished to the individual and filed with the IRS are late) not to exceed $3,000,000.