With the new year will come new requirements for Affordable Care Act (ACA) reporting. Starting in January 2016, employers will have to report their employee group health plan information to the IRS and fill out 1094-C and 1095-C forms. The requirements for ACA reporting are complicated and dense. Luckily, the IRS is aware of how complex the new ACA reporting requirements are so there won’t be a penalty on any employers who make an effort to get their forms in, even if there are mistakes. However, employers that don’t make any attempt at all could be penalized up to $250 for a maximum of $3,000,000. That’s a risk you don’t want to take. Here’s what you need to know about ACA reporting to stay ahead of the game.
Not sure if your company is required to participate in ACA reporting? If you’re not considered an applicable large employer, in other words an employer that has at least 50 or more full-time employees, you aren’t required to report. However, if your business does fall under this category, you’ll need to start getting your data and paperwork ready for January. If you are an employer that sponsors self-insured plans, you will need to comply with reporting rules regardless of how many employees you have.
The new ACA reporting rules require the use of two different forms, the 1094-C and the 1095-C. The 1094-C provides a summary to the IRS about your related employers, a list of your full-time employees that qualify for group health coverage, and how long you are offering these group health coverage plans. The 1095-C form goes to the IRS and to all of your full-time employees. This form includes info on each specific employee’s group health coverage and the coverage of their spouses and dependents.
These forms need to be filed when you file your W-2 and W-3 forms. You’ll want to have all of your paper forms handed in to the IRS no later than February 28th. If you are filing electronically, you have until March 31st. Employers that file more than 250 reports are required by the IRS to file electronically.
The thing that throws many employers off about the new ACA reporting requirements is figuring out which full-time employees need a 1095-C form. Employees for whom you are subject to penalties under the employer-shared responsibility final regulations are considered to be your full-time employees and will need to a 1095-C form. Be careful not to over-report your full-time employees, though, as the number you report to the IRS might be used to figure out an initial penalty assessment.
Any new changes in filing and reporting can seem overwhelming and confusing but if you have an understanding of what you need to do and when you should do it, you can greatly reduce the chance of running into problems. Employers should start gathering their data and filling out the paperwork now to avoid any hiccups that can cause delays and possibly penalties.
