Under the Affordable Care Act some employers must file with the IRS for 2015, and deadlines are looming. Here’s what you must file and when you must do it.
The Affordable Care Act (ACA) requires employers to complete statements and file forms with the IRS, and the first-ever deadlines for these previously delayed directives are just around the corner in early 2016.
Your ACA employer obligation is two-fold. First, your company must furnish all full-time employees with statements of health care coverage. Employees will use that information to report their coverage when filing their 2015 taxes. Second, you must file forms with the IRS so it can determine if you are offering your employees sufficiently affordable health insurance that meets minimal coverage requirements — or whether you must pay a penalty for failing to do so.
Meeting the complex requirements of the ACA’s employer mandate can be challenging for manufacturers and distributors, especially during this initial year of reporting. It’s a new and involved process, so we’ve broken it down to help you make sense of it and fully comply.
Many manufacturers and distributors affected
A great number of manufacturing and distribution companies in the United States meet the ACA employer reporting criteria. If your company fit either of these two descriptions in 2015, you are obligated to comply:
- If you employed 50 or more full-time and full-time equivalent (FTE) employees, you are deemed an applicable large employer (ALE), and all ALEs are beholden to the mandate. A full-time employee works, on average, at least 30 hours a week or 130 hours per month. FTEs are figured by adding all part-time hours in a month and dividing by 120.
- Your company was a plan sponsor of self-insured health care coverage.
What your company must report
If your company is an ALE or you offered your people self-insured health coverage, you must provide the IRS the following:
- Contact information
- Certification that you offered your full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan
- The number of your full-time and total employees for each calendar month in 2015
- The months during calendar year 2015 that minimum essential coverage under the plan was available to each full-time employee, as well as each employee’s share of the lowest-cost monthly premium for self-only coverage
Compliance deadlines
Statements to full-time employees must be provided on or before February 1, 2016. (January 31 will be the standing deadline for every year going forward.) The normal deadline to file with the IRS is on or before February 28 (March 31 if filed electronically) of the year following the calendar year in which the benefits were offered. However, returns required for the 2015 calendar year must be filed no later than February 29, 2016. (Leap year affords you one extra day to comply.) If you file electronically, your deadline is still March 31, 2016.
Forms to file
| Employer description | Required forms |
|---|---|
| Small employer (fewer than 50 full-time employees and FTEs in 2015) that does not provide self-insured health benefits | No filing requirement |
| Small insured employer | Insurance company files Forms 1094-B and 1095-B |
| Small self-insured employer | Employer files Forms 1094-B and 1095-B |
| ALE that does not provide health benefits | Employer files Forms 1094-C and 1095-C |
| ALE that is insured | Employer files Forms 1094-C and 1095-C, and insurance company files Forms 1094-B and 1095-B |
| ALE that is self-insured | Employer files Forms 1094-C and 1095-C |
Your plan of action
To avoid or minimize penalties, your company should start preparing to comply and meet the looming deadlines now. Consider these your first steps:
- Determine if you are an ALE
- Make a list of the information you need to file
- Confirm the health benefits you provided to your employees
- Set up protocols and mechanisms for tracking the required information
- Decide who will prepare your company’s IRS filings and employee statements
How we can help
CLA understands the ACA complexity and reporting requirements. We can take care of your compliance functions for you and minimize any penalty risks. Our M&D industry and health care practitioners team up to help you comprehensively manage this daunting new challenge, including:
- Implementing software to track information and monitor employee status
- Identifying appropriate forms to satisfy reporting requirements
- Tracking hours to avoid penalties
- Setting alerts for employees approaching full-time status
- Providing online tools for workforce and measurement period monitoring
- Managing IRS penalty notices
- Designing a plan for you to understand how your options affect key stakeholders