The Affordable Care Act (ACA) brings with it specific reporting requirements for employers to ensure that they are offering employer-sponsored health care coverage to a particular number of their employees and their dependents under the Employer Shared Responsibility provisions (at least 70% of full-time employees and dependents in 2015 and at least 95% in 2016).
In addition, plans must meet a number of criteria regarding affordability and coverage options. To confirm compliance with these ACA rules, certain IRS forms must be sent to both individual employees and to the IRS.
“Applicable large employers” (or ALEs – generally those with 50 or more employees) must file both 1094-C and 1095-C (one for each full-time equivalent employee) to let the IRS know whether or not they offered health coverage to their employees, who was eligible, the details of the offered plan(s), how many employees were provided coverage, and the cost to each employee who participated, among other details.
Rules for ALEs have recently been clarified and changed. As you prepare your required documentation for 2015, review the tips below to ensure that you remain compliant:
First, it’s important to know that the filing deadlines for Forms 1094-C and 1095-C have recently been extended to allow ALEs ample time to gather the necessary information:
The due date for furnishing the completed 2015 Form 1095-C to employees is extended from February 1, 2016 to March 31, 2016
The due date for furnishing Forms 1094-C and 1095-C to the IRS is extended from February 29, 2016 to May 31, 2016, if not filing electronically
The due date for employers electronically filing Form 1094-C and Form 1095-C with the IRS is extended from March 31, 2016 to June 30, 2016Of course, if your organization’s information is ready before these deadlines, the IRS is encouraging employers to file their paperwork early. Who
Needs a Form 1095-C?
However, there are a few exceptions to the rule above. Form 1095-C is not required for the following employees unless they or a member of their family was enrolled in an ALE’s self-insured plan:
Generally, an ALE must file Form 1095-C (or a substitute form) with the IRS for each employee who is considered full-time for any month of the calendar year. Employees must also receive a completed copy of their form. In addition, an ALE that sponsors a self-insured plan must file Form 1095-C for each employee who enrolls in the self-insured health coverage or enrolls a family member in the coverage, regardless of whether the employee works full-time for any month of the calendar year.
An employee who was not considered full-time in any month of the calendar year
An employee who was in a limited non-assessment period for all 12 months of the year (i.e. a new variable hour employee who is still in an initial measurement period)
Some of the reporting requirements may leave you wondering whether you really have it right. Here are a few other tips to keep in mind when preparing Forms 1094-C and 1095-C for your organization:
Part II of Form 1095-C is used to report whether an offer of coverage was made to an employee for each month of the year. Remember that an “offer of coverage” is considered to have been made for the month only if it would provide coverage for every day of that calendar month – not just a portion of it.
If you decide to provide a substitute form instead of Form 1095-C, it must include the same information as the original and comply with the IRS’s “generally applicable requirements” for substitute forms.
Part III of Form 1095-C is only meant for a particular group of ALEs. If you sponsor a health plan that includes self-insured options and insured options, you must complete this section only for employees and family members who enroll in the self-insured option. On the other hand, if you only offer coverage through an employer-sponsored insured health plan (and do not sponsor an additional self-insured health plan), Part III is not necessary.
Also, while ALEs must file Form 1094-C with the IRS, this completed form does not need to be provided to full-time employees. They will only receive Form 1095-C with their individual information – not the firm’s information as a whole.
ACA requirements and regulations for employers are still fairly new and may be confusing, especially as they have changed over time. If you need assistance understanding what is required of your organization and how to prepare your healthcare coverage information for the IRS and remain compliant, Hanson & Co. wants to help! Call us at (303) 388-1010 or click here to contact us. We look forward to speaking with you!