ACA Employer Mandated Reporting – Part II
You’ve determined your company is an Applicable Large Employer (ALE) as defined under the Affordable Care Act (ACA), now what? All ALEs are required to file 2015 Forms 1094-C and 1095-C. The Form 1094 is a transmittal form similar to the W-3 that accompanies the W-2’s filed with the IRS. The Form 1095 is the actual notice each covered individual will receive annually similar to the W-2 and Forms 1099.
Individuals who purchased health insurance from the Federally-facilitated Marketplace, i.e. exchanges, will receive a Form 1095-A, Health Insurance Marketplace Statement, from the IRS. Information from the Form 1095-A will be used to complete the individual’s income tax return.
Health insurance issuers and carriers will file Forms 1095-A and 1095-B for all insured employer coverage. The health insurance carriers will also distribute Forms 1095-B to each covered employee. Small employers that sponsor self-insured group health plans will use Forms 1094-B and 1095-B to report information about covered individuals and distribute Forms 1095-B to covered employees.
ALE Form 1094/1095 Filing Requirements
Applicable Large Employers (ALE) with 50 or more full-time employees (including full-time equivalent employees) in the previous year, must file a Form 1094-C, Authoritative Transmittal, and file a Form 1095-C for each employee who was a full-time employee for any month of the calendar year. The employer is also required to furnish a copy of the Form 1095-C to the full-time employee.
An ALE that offers fully insured benefit will complete Form 1095-C, Parts I (Employee Information) and Part II (Employee Offer and Coverage) for every employee who enrolled in the health coverage whether or not the employee is a full-time employee for any month of the calendar year. An employer that offers health coverage through an employer-sponsored self-insured health plan will also complete Form 1095-C, Part III (Covered Individuals,) including dependent information.
It is our understanding that individuals covered under a fully insured health benefit plan will receive a Form 1095-B from the insurance carrier and a Form 1095-C from their employer.
The 2015 Forms 1095 are required to be distributed to covered employees by January 31, 2016. Forms 1094/1095 are required to be filed with the IRS by February 29, 2016 if filing on paper and March 31, 2016 if filing electronically. Employers with 250 or more forms are required to be filed electronically through the IRS new ACA Information Returns (AIR) system. A 30-day extension of time to file can be requested by filing Form 8809, Application for Extension of Time to File Information Returns, on or before the due date of the returns.
The IRS has promised to waive penalties for inaccurate or incomplete returns filed for the 2015 filing year. However, the employer must demonstrate a good faith effort to be incompliance by timely filing the returns.
Contact 5500Tax Group to discuss your particular situation.
