The new reporting requirements under the employer mandate of the Affordable Care Act are complex and potentially involve significant new employer reporting. As such, it is important to ensure that you are prepared and are thinking about the steps you need to take now.
Employers with more than 50 full-time employees or the equivalent, and employers of any size who sponsor self-insured health plans, are subject to the new reporting requirements.
The new reporting requirements are being utilized to provide the IRS with information regarding health coverage, such as:
- covered employees and their dependents,
- type of plan: Minimum Value, Cost of Self-only Coverage,
- affordability and information about the type of employee covered: full-time, part-time, or seasonal.
If you are a Small Employer maintaining a self-insured health plan (i.e., less than 50 employees), or an Applicable Large Employer or ALE (meaning that you have 50+ full-time employees or the equivalent), then you need to make certain that whomever will prepare the IRS Tax Forms 1094-B and 1095-B (for Small Employers) or 1094-C and 1095-C (for ALEs) is well versed and that they understand how to complete the forms. The hidden danger is that your payroll system/vendor might not be ready to report on 2015 data in January 2016. Many employers are now in the process of upgrading their software systems to avoid manual form completion.
You can start addressing these new requirements by asking yourself some key questions:
- Have you determined whether you are a Small Employer or an ALE for 2015?
- Are you familiar with the transitional relief rules that may provide more time before potential penalties are possibly assessed?
- Have you conducted a review of the necessary data collection items?
- Is your payroll platform capable of reporting all the necessary data elements that are to be reported on IRS Forms 1094-B/C and 1095-B/C?
- Are you familiar with the tax forms and know how to complete them properly?
- Will your payroll provider be able to provide these forms, similar to a W-2 and W-3?
The calculation to determine if you are an ALE can be tricky and a reputable advisor can assist in this determination. If you are an ALE, there is a lot to review with your advisor.
The due date for issuing the new 1095-B/C forms for 2015 to employees is February 1, 2016, while the due date for filing the 1094-B/C and 1095-B/C forms with the IRS is February 29, 2016 (or March 31, 2016, if filing electronically).
If you haven’t started thinking about these questions, or if you need assistance in gathering the necessary information or need expert guidance on these Healthcare Reform regulations and administrative nuances, then please reach out to your Benefits Advisor as soon as possible. Alternatively, we can assist you with an introduction to a qualified expert who will be able to give you the needed guidance in this area.
Please call us at 703.385.8888 if you have any questions.