Affordable Care Act -- New Filing Requirements for 2015
Effective as of 2015, the Affordable Care Act (“ACA”) has placed requirements on employers and insurance providers for filing new informational forms with the IRS and health plan participants.
The new filing requirements will be an add-on to the year-end burden of issuing informational returns. The new informational forms include Forms 1095-B and 1095-C (with their respective forms for transmittal, Forms 1094-B and 1094-C). Beginning in 2016, deadlines for filing the 2015 forms with the IRS will be February 28 or, if electronically filing, March 31. As with the Forms W-2 and 1099s, the plan participants must receive the Forms 1095 no later than January 31. A penalty of up to $200 per form will be charged for failing to provide these statements to recipients.
Insurance companies for employer-sponsored group health plans and employers with self-insured plans will be responsible for filing Forms 1095-B (Health Coverage) and 1094-B (Transmittal of Health Coverage Information Return). The forms will be used to report the covered person’s name, address, social security number and date of birth as well as their family members covered by the plan. There is no requirement to file these forms for any employee who opts out of health plan.
Applicable large employers will be responsible for filing Forms 1095-C (Employer-Provided Health Insurance Offer and Coverage) and 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage). Applicable large employers are defined as those that had 50 or more full-time employees (which would also include full-time equivalent calculation for the employer’s part-time population) during the prior calendar year. In order to be considered full-time, the employee must have worked a minimum of 30 hours per week.
Forms will be required for all full-time employees regardless of whether the employee is participating in the employer’s health plan. For employees that are designated as not full-time, filing is only required if the employee is actually participating in the plan.
Much has been made of the transitional relief provided large employers with respect to the employer shared responsibility penalty for 2015. During 2015, for purposes of this penalty, large employers are now defined as those with 100 (as opposed to 50) or more full-time employees. For purposes of filing Forms 1095-C and 1094-C, the definition of a large employer remains at 50 or more full-time employees.
Failure to file these forms (or filing them with significant errors) could expose your business to onerous penalties. Most of the information needed should already reside with your payroll service provider and insurance carrier, who can then use this information to produce these forms next January. We say should, but many businesses may not be providing their payroll company or insurance carrier with the proper information. As each month passes, the compliance hole that your business may be digging for itself is likely getting deeper. From what has been observed so far, many payroll companies and insurance carriers are not proactively informing their customers of these compliance issues. Businesses need to take an active role now in determining what compliance reports need to be filed and how that is going to get done. We suggest that you contact your payroll service firm and insurance carrier as soon as possible to see what steps they are taking to insure your compliance with these filing requirements.