Are You in Compliance with the Affordable Care Act Reporting Requirements?
The Affordable Care Act (ACA) includes several new reporting requirements under the Internal Revenue Service (IRS) tax codes. In 2015 these requirements will apply to large employers. The IRS defines large employer as employers with 50 or more full-time employees, including full-time equivalent employees. As of today’s date, the definition of full-time remains at 30 hours per week. The current Congress is attempting to change the full-time definition to reflect 40 hours per week. Full-time equivalent employees may include part-time and or seasonal employees.
If you are a large employer you have two reporting requirements for 2015.
The first report is Section 6055and requires employers to report information to the IRS about their compliance with the employer shared responsibility provisions, including the type of health care coverage offered to employees. If your health plan is fully insured, your health plan carrier will provide the required data to the IRS. If you are self-insured you must file an information return and transmittal with the IRS and also furnish statements to applicable employees on forms prescribed by the IRS.
The second report is Section 6056 and concerns information reporting by applicable large employers on health insurance coverage offered under employer-sponsored plans. The same “applicable large employers” are also subject to these reporting requirements.
The Section 6056 regulations provide employers with a general reporting method. Employers will satisfy the reporting requirements if they file returns for each of their full-time employees using Form 1095-C and a transmittal form using Form 1094-C (or other forms the IRS designates). Such returns and transmittal forms must be filed on or before February 28 (or March 31 if filed electronically) of the year after the calendar year to which the information in the filing relates.
Employers must supply the required statements to employees by either providing them with copies of Form 1095-C (or another form the IRS designated) or a substitute statement. A substitute statement must include the information required to be included on the return filed with the IRS and must comply with certain other requirements. Employers must provide these statements to applicable employees on or before January 31 of the year after the calendar year to which the information in the filing relates. The Form 1095-C is similar to the annual W-2’s employers issue today.
You are encouraged to engage your payroll provider, health plan carriers and brokers to obtain the data required to file your Section 6055 and Section 6056 reports. Although the reports will be due in January 2016, you must calculate your monthly full-time and full-time equivalents throughout 2015.
Guest blog written by Bill Blouin at Propeller HR Solutions.