This post was authored by Heather DeBlanc
Over the last year we watched multiple unsuccessful attempts to repeal and replace the Patient Protection and Affordable Care Act (“ACA”). Now, ACA’s reporting deadlines are merely months away and the chance of repeal is low. Employers who are “applicable large employers” (“ALEs”) and Employers who offer self-insured health plans must comply with ACA’s reporting requirements or face penalties.
What’s an ALE? An ALE is an “applicable large employer” pursuant to the ACA’s special calculation. It means you have at least 50 full-time employees (including full-time equivalents). The ACA defines a full-time employee as one who averages 30 or more hours of service per week.
What’s the relevance of being an ALE? An ALE must comply with the Employer Mandate and ACA’s Reporting Requirements or face penalties.
What is the Employer Mandate? The law that says an ALE must offer affordable coverage to substantially all full-time employees and their dependents, or face potential penalties.
What is the ACA Reporting Requirement? The law requires that ALE’s report to the IRS the offer of coverage made to full-time employees. The IRS uses this information to determine compliance with the Employer Mandate. Employers who offer self-insured health plans also must report to the IRS those employees who enroll in the self-insured coverage.
What do I tell Employees? An Employer must provide to each employee reported on, a “statement” or a copy of the Form to be filed with the IRS.
What is a “self-insured” health plan? A self-insured plan is one where you, as the employer, are paying the claims, as opposed to an insurer.
What Forms must be provided to Employees?
- ALE – A copy of Form 1095-C to every ACA full-time employee (and, if applicable, every employee receiving self-insured coverage)
- Not an ALE, but provides self-insured coverage – A copy of Form 1095-B to every employee who enrolled in the coverage.
What are the ACA Reporting Deadlines?
- January 31, 2018 – Copies of 1095-C/1095-B Forms to Employee
- February 28, 2018 – ALE Reporting covering 2017 tax year due to IRS, if filing hard copy returns
- March 31, 2018 – ALE Reporting covering 2017 tax year due to IRS, if filing electronically (Note: ALE’s filing at least 250 returns must file electronically)
What Forms must be filed with IRS?
- ALE’s (incl. those with self-insured plan) – Forms 1094-C and 1095-C
- A separate 1095-C must be filed for each full-time employee or employee enrolled in self-insured coverage
- Not an ALE, but provides self-insured coverage – Forms 1094-B and 1095-B
- A separate 1095-B must be filed for each enrolled employee
What are the Penalties for Failure to Report?
- Failure to file return = up to $260 per return ($3,193,000 max.)
- Failure to provide statement to employee = up to $260 per statement ($3,193,000 max.)
- Intentional Disregard = up to $530 per return (no limitation)
Where do I find the Forms and Instructions for Filing?
- Form 1094-C: https://www.irs.gov/forms-pubs/about-form-1094-c
- Form 1095-C: https://www.irs.gov/forms-pubs/about-form-1095-c
- Form 1094-B: https://www.irs.gov/forms-pubs/about-form-1094-b
- Form 1095-B: https://www.irs.gov/forms-pubs/about-form-1095-b
Note: If you are using a vendor to complete your forms, please double check for accuracy. The IRS will ultimately hold the employer responsible, not the vendor.