Updated: Nov 11
The long implementation related to the Affordable Care Act continues into 2015. Beginning this year, certain employers will be required to provide information to the IRS about health coverage they offer to their employees. The reporting requirements are designed to aid the government's ability to enforce the individual mandate (which was effective in 2014) as well as the employer mandate (which is effective beginning in 2015).
Requirements for Large Employers
The Affordable Care Act defines a "large employer" as an employer which employs an average of at least 50 full-time employees during the preceding year (in this case 2014). A full-time employee is one who works on average 30 hours per week. Employers who meet these criteria will be required to file Forms 1094-C and 1095-C for 2015.
The 1095-C is the detail that will be submitted for each employee. One form will be completed for each covered employee and will include each family member covered by the plan. The employer will need to indicate (using check boxes) which months during the year the individuals were covered.
Plans sponsored by large employers will need to provide additional information relating to the type of coverage offered to the employee. This information will be provided by "indicator codes." The codes will indicate whether minimum essential coverage was offered to the full-time employee, his/her spouse and dependents or whether the coverage was only offered to the employee (to name only 2 of the 9 options provided in the IRS instructions). Depending on the code used, the employer may need to provide information on the employee share of the lowest cost monthly premium for self-only coverage under the employer plan. In addition, the employer may need to provide information indicating why the employee was not covered during some months. This information will be provided using a second set of "indicator codes." These codes will indicate that an employee was not employed during a specific month or was not a full-time employee during that month (again naming only 2 of the 9 possible codes in the IRS instructions).
The employer will also be required to complete a Form 1094-C which is a summary transmittal form similar to a Form W-3 or 1096. This form will include information about the employer and will need to indicate for each month during the year whether minimum essential coverage was offered to at least 95% of its full-time employees. For each month during the year, the employer will need to indicate the number of full-time employees, as well as the total number of employees.
Requirements for Small Employers
The only small employers who will have new reporting requirements for 2015 will be those employers who have self-insured plans. These employers will need to file Forms 1094-B and 1095-B.
Form 1095-B will report the detail information for each employee and any family members covered by the self-insured plan.
The Form 1094-B is a summary transmittal form similar to a Form W-3 or 1096. This form will include the employer information and will indicate how many detail forms are attached.
The detail schedules, Forms 1095-B and 1095-C, are required to be provided to the covered individuals by January 31, 2016. The detail schedules along with their transmittal forms, must be provided to IRS by February 28, 2016 if filing on paper. If the forms are electronically filed, the due date is March 31, 2016.
These new reporting requirements for 2015 will cause employers to need to gather additional information. In order to avoid any last minute rush and to make sure the employer has access to all of the required information, we strongly recommend that employers contact their health insurance provider to determine whether the provider will be preparing the forms. If the insurance company is preparing the forms, employers will need to discuss with the company what information the employer needs to provide.
If employers determine that the insurance provider is not going to complete the forms, the employer should discuss with the insurance provider what information will be provided to the employer so that the employer can begin the process of gathering the information needed for the employer to complete the forms.
An employer with a self-insured plan will need to put systems in place now to make certain that the required information will be available when needed.
If employers need assistance in discussing these forms with their insurance provider, determining whether the insurance provider will be preparing the forms and ascertaining the information the employer will need to gather to either prepare the forms or provide to the insurance company, we will be happy to help in any way we can. We anticipate that the first year completing these forms may be challenging, so beginning the process now may save many headaches down the road.
Copies of all forms mentioned in this article are available on the IRS website at www.irs.gov.
The instructions for the large employer forms (Forms 1094-C and 1095-C) can be found by clicking here.
The instructions for the small employer (self-insured) forms (Forms 1094-B and 1095-B) can be found by clicking here.
If you have any questions about the information in this article or should you want additional information, please contact us at email@example.com.