The Affordable Care Act requires all applicable large employers to report health coverage information for 2015. These employers need to provide Form 1095-C to employees and file Form 1095-C and Form 1094-C with the IRS in early 2016. Preparing these forms requires tracking monthly information about your employees and the health care coverage offered them, if any.
Is my organization an applicable large employer?
Non-profit, for-profit, and governmental organizations (or aggregated groups) qualify as applicable large employers if they employed an average of 50 or more full-time employees during the previous year. A special rule for 2015 allows employers to use any consecutive six-month period of 2014, rather than all 12 months, to determine whether they are considered applicable large employers for ACA purposes.
If special circumstances qualify you for transition relief from employer shared responsibility payments for 2015, reporting requirements still apply to you.
If you are not an applicable large employer, but you are an employer that sponsors self-insured coverage, certain reporting requirements apply to you.
When should I begin preparing for the new reporting requirements?
You should begin immediately; the new IRS forms require you to track data about your full-time employees and the coverage you offer month-by-month.
What information do I need to track each month in 2015 in preparation for filing Form 1095-C and 1094-C?
• How many total employees did you have?
• How many full-time employees did you have?
• Who are your full-time employees for each month? What are their names, addresses, and other identifying information?
• What’s the total number of Forms 1095-C you issued to employees?
Offered Health Coverage Information
• Are you part of an aggregated applicable large employer group?
• Are you eligible for transition relief?
• Did you offer your full-time employees and their dependents health coverage in 2015?
• If so, did you offer coverage to 70% of your full-time employees and their dependents? (After 2015, this threshold will rise to 95%.)
• Did it qualify as minimum essential coverage? (Minimum essential coverage does not include fixed indemnity coverage, life insurance, dental or vision coverage.)
• Did the coverage meet minimum value requirements? (In other words, is it designed to pay at least 60% of the total cost of medical services? Download the minimum value calculator for precise calculations. Plans with nonstandard features must obtain actuarial certification.)
• Was it affordable? (Coverage is affordable if the lowest-cost self-only plan was equal to or lower than = 9.5% of your full-time employee’s household income.)
• For lowest-cost self-only minimum value coverage, what was the employee’s share of the monthy premium?
Employee-Specific Health Coverage Information
• Which employees were enrolled in the coverage you offered?
• If you offered a self-insured plan, which employees were enrolled?
• For each employee, did you meet an affordability safe harbor, and did other relief apply to the employee?
Why should I track this information?
You could be subject to an employer shared responsibility payment if one of your full-time employees receives a premium tax credit for purchasing individual coverage on one of the Affordable Insurance Exchanges (“Marketplace”).
I have more questions. Where can I find answers?
Visit the Q & A on Employer Shared Responsibility Provisions Under the Affordable Care Act for more answers from the IRS.
View the Final Regulations about Shared Responsibility for Employers Regarding Health Coverage published in February 2014 for a full view of Shared Responsibility rules.
As always, we are here to help you any way we can. Please don’t hesitate to call or email if you need us.
The Deerfield Team
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