Action Required Now
By: Jeffrey R. Spencer, CPA, Principal, Ciuni & Panichi, Inc.
The Affordable Care Act (ACA) imposes significant new reporting requirements on large employers beginning with the 2015 calendar year. The ACA defines “large” as those employers with 50 full-time or full-time equivalent employees. For this purpose, “full-time” is defined as 30 hours per week.
Large employers must file the new IRS information returns (Forms 1094 and 1095) to report information about their health plans and their workforce for the 2015 calendar year. These new forms are similar in scope to a Form W-2, since an information return (Form 1095-B or 1095-C) will be prepared for each applicable employee, and these returns will be filed with the IRS using a transmittal form (Form 1094-B or 1094-C). Electronic filing is required for employers filing at least 250 returns.
Employers must file these new returns annually with the IRS beginning in 2016 by February 28th (March 31st if filing electronically). A copy of the Form 1095 (or a substitute statement) must be given to each employee by January 31st.
Applicable large employers must prepare a Form 1095-C for each full-time employee regardless of whether the employee is participating in their group health plan. The employer also will complete a Form 1095-C for each non-full-time employee in the plan. Form 1095-C reports the following information:
- The employee’s name, address, and Social Security number
- Whether the employee and family members were offered health coverage each month
- The employee’s share of the monthly premium for the lowest-cost health coverage offered
- Whether the employee was a full-time employee each month
- Whether the employee was enrolled in the health plan
- If the health plan is self-insured, the name and Social Security number (or date of birth if SSN not available) of the employee and each family member covered by the plan by month
The transmittal form, Form 1094-C, reports the following information:
- The total number of Forms 1095-C filed
- The number of full-time employees for each month
- The total number of employees for each month
Due to the complexity of these new reporting requirements, employers should:
- Develop procedures to determine and document each employee’s monthly employment status
- Develop procedures to collect monthly data regarding offers of health coverage and health plan enrollment
- Discuss the reporting requirements with their health plan insurer and/or third-party administrator as well as their payroll provider to assign responsibility for data collection and forms preparation
The new ACA reporting rules are complicated and burdensome, and employers’ payroll systems and processes need to handle these additional requirements. Now is the time to verify your systems and policies are collecting the necessary 2015 data to ensure compliance with the reports due early next year.
Please contact Jeff Spencer at 216-831-7171 or jspencer@cp-advisors.com for more information on this topic or on other ACA issues.
Jeff Spencer is a Tax Principal at Ciuni & Panichi, Inc., and he is the head of the Employee Benefits Tax Services Group.
