Beginning in the 2015 tax year, employers will be required to annually report certain information to the Internal Revenue Service (IRS) on a calendar basis. Reporting requirements under the Affordable Care Act (ACA) apply to most employers to some extent, even if they don’t currently offer health coverage to their employees.
Mistake #1– Only large employers that sponsor group health plans are required to report.
Large employers subject to the Employer Shared Responsibility provision (“Pay or Play”)—generally those with 50 or more full-time employees, including full-time equivalents (FTEs)—are required to report information to the IRS about their compliance with the minimum essential coverage. In addition, any person, including health insurance issuers, self-insured employers, government agencies and other entities that provide minimum essential coverage to an individual during a calendar year, must report certain information to the IRS.
Mistake #2– Employers that qualify for 2015 transition relief from “Pay or Play” penalties do not have to report.
Large employers with 50 to 99 full time employees, including FTEs, that are eligible for transition relief based on size are still subject to the reporting requirements for 2015 and must certify on the 2015 transmittal Form 1094-C (to be filed in 2016) that they meet the applicable eligibility criteria. Large employers eligible for non-calendar year plan transition relief are also subject to reporting requirements for 2015, and must certify on the 2015 transmittal Form 1094-C (to be filed in 2016) with regard to their 2015 plan years, including the months of the 2015 plan year that fall in calendar year 2015.
Mistake #3– Penalty relief is available for all types of reporting errors.
Relief will be available from penalties for incomplete or incorrect information reported on 2015 returns or statements filed and furnished in 2016 if the reporting entity can show good faith efforts to comply with the information reporting requirements. No relief will be provided to reporting entities that fail to timely file a return or furnish a statement, unless the IRS determines that the standards for reasonable cause under section 6724 are satisfied.
Mistake #4– All employers are required to file electronically.
Providers that file 250 or more information returns during the calendar year are required to file Forms 1094-B and 1095-B electronically. All other reporting entities can choose to file returns either electronically or on paper. Providers that file Form 1095-B must furnish copies to the responsible individual on paper and by mail, unless the recipient affirmatively consents to receive the statement in an electronic format.
Mistake #5– Large employers that sponsor self-insured group health plans must use both sets of forms to satisfy their reporting obligations.
Self-insured employers with 50 or more full-time employees and FTEs are also subject to the information reporting requirement for offers of employer-sponsored health insurance coverage, and must combine reporting under both provisions by filing a single information return, Form 1095-C, and transmittal, Form 1094-C.
If you have additional questions about information reporting requirements under the Affordable Care Act (ACA), contact McGrath Insurance Group at 800-342-3859 or www.mcgrathinsurance.com. Download our free Affordable Care Act Guide below.
*This article is written for informational purposes only and should not be construed as providing legal advice.