Affordable Care Act Employer Heath Care Coverage Reporting

Beginning in early 2016, the Affordable Care Act (ACA) will require certain employers to report health coverage information to the IRS and furnish a statement about health coverage to their employees on an annual basis. As the ACA continues to change and evolve, it is a challenge for employers to maintain compliance. Although Hayashi Wayland is not an expert in this area, we are able to assist our clients through many of the complexities of the reporting requirements.

Forms 1094 and 1095, described below, will be used to report minimum essential coverage (MEC) and certain details regarding coverage offered by applicable large employers (ALEs). For the 2015 calendar year, appropriate forms must be filed with the IRS no later than February 29, 2016, or March 31, 2016, if filed electronically. However, you must furnish a copy to your employees and certain other non-employees, such as retirees enrolled in coverage, no later than February 1, 2016.

Who is subject to reporting requirements:
Reporting requirements differ based on the size of the employer and the type of coverage the employer sponsors. Another factor to consider is whether you are part of a controlled group – a group of companies with a common owner. Controlled groups are treated as a single employer under ACA regulations and if collectively the companies employed 50 or more full-time (FT) and full-time equivalent (FTE) employees in the 2014 calendar year, each company will be considered an ALE and subject to those provisions.

Small Employers (Fully Insured):
If you offer a fully insured health plan and had fewer than 50 FT and FTE employees in the 2014 calendar year or during the look back period for 2014, you are not required to file any forms. Your insurer is responsible for filing the required forms with the IRS and furnishing a statement to your employees.

Small Employers (Self-Insured)Forms 1095-B and 1094-B:
Generally, if you had fewer than 50 FT and FTE employees in the 2014 calendar year, and have a self-insured health plan, you must complete and furnish Forms 1095-B to the enrolled individuals and file Forms 1095-B and 1094-B (transmittal) with the IRS.

Large Employers (Fully Insured or Not Insured) – Forms 1095-C and 1094-C:
Generally, if you had 50 or more FT and FTE employees in the 2014 calendar year, you must complete and send Form 1095-C (Parts I and II) to FT employees and file Forms 1094-C and 1095-C (transmittal) with the IRS. Your insurer will complete Part III of the 1095-C and will report the coverage information on Forms 1094-B and 1095-B. You must furnish and file a 1095-C for each employee who was a FT employee (30 or more hours on average per week) for any month of the calendar year.

Large Employers (Self-Insured) – Forms 1095-C and 1094-C:
Generally, if you had 50 or more FT and FTE employees in the 2014 calendar year and offer self-insured health coverage, you must complete and file Forms 1095-C and 1094-C (transmittal) with the IRS and furnish Form 1095-C to FT employees (whether or not enrolled in coverage), any part-time employees and certain other non-employees, such as retirees enrolled in coverage.

Are you prepared?
If your company is subject to these reporting requirements, start gathering the necessary data now in order to meet the applicable deadlines; data such as dependent names, dependent social security numbers, months of insurance coverage and monthly premium cost in conjunction with data from your insurance carrier. If you file late, you may be subject to a penalty up to $250 per form. Also consider: communicating the new forms to your employees who will see them for the first time in January 2016, letting employees know they will need the information to prepare their 2015 tax returns, and coordinating your communication strategy with your insurer if your insurer is responsible for providing the forms.

For the latest ACA changes and information, go to any of these available resources:

You may contact our office for help navigating the new forms and corresponding filing requirements, however your health insurance carrier is your best resource for help determining the best way to collect the information. Additionally, there are a number of software reporting packages and third-party service providers available to help with the filing requirements as well.