Affordable Care Act Update: 2015 Reporting Requirements

It’s the holiday season which means many of you are making your lists and checking them twice … both at home and at work. For applicable large employers, this year’s list must include IRS reporting. Not as bad as a lump of coal in your stocking, but almost!

So what's involved with Affordable Care Act reporting for 2015? Below is a brief overview.

• Who does this reporting requirement pertain to? "Applicable large employers," or ALEs. Click here to find out if that's you. If you have 50 employees who are full-time (or full-time equivalent, or a combination of the two), it's probably you. Don’t make the mistake of thinking that “ALE transition relief” means that you don’t have to report. All ALEs must report.

• What are ALEs required to report? When ALEs offer group health coverage to full-time employees, they need to report certain details in a manner similar to what they use when reporting W-2 wages.

• Which forms are used? ALEs will use form 1094-C to report health plan coverage to the IRS. They'll use form 1095-C to report to employees and others who are enrolled.  A copy of the 1095-C forms must also be sent to the IRS. If an ALE sponsors a self-funded group plan, it will need to complete forms 1094-B and 1095-B as if it was a health insurance carrier.

• What data will I need to complete the reports? Before you can complete the reports, you will need to know the identities of all employees who were offered coverage and the all employees who were covered by your health plan each month. You will have to specify the type of plan chosen by each employee, the price of coverage and the affordability safe harbor you use.

• What's the penalty for failing to comply? If you accidentally fail to send reports to the IRS, your employees, or others who are enrolled, you'll be liable for $250 per report, per year, up to $3 million. If you fail to send the forms on purpose, the penalty is $500 per report, per year, with no cap. That’s not the only fee on the table, either. If you were to fail to offer full-time employees minimum essential coverage, you'd be liable for additional penalties as well.

• Is there a deadline? Yes, and the deadlines are coming fast. Paper 1095-C forms must be sent to employees and others who are enrolled by February 1. Electronic statements can only be used if you have received individual consent. Paper 1094-C and 1095-C forms are due to the IRS by February 29. Electronic 1094-C and 1095-C forms are due to the IRS by March 31.

Do you have other questions? Head over to the IRS FAQ for more information. Also, here’s this year’s IRS bulletin, issued in September, with a much deeper level of detail for you to dig into. Best of luck in laying the groundwork now for a reporting season! And as always, if you need assistance, make sure to contact Heffernan’s Benefits Advisory Services.