ACA Reporting – Time to start getting ready!

With 2015 fast approaching, are you ready to start collecting and tracking the necessary data to complete the reporting requirements under IRS Section 6055 and 6056? Requirements include the tracking of summary employee data and benefit plan information. The Draft Instructions can be found on the IRS website or at http://www.irs.gov/pub/irs-dft/i109495c–dft.pdf

1. Section 6055 applies to employers that offer Minimum Essential Coverage (MEC). IRS will use this reporting to monitor compliance with the individual mandate to obtain MEC or pay a penalty. This reporting verifies coverage under MEC for the IRS and taxpayers.
2. Section 6056 applies to all Applicable Large Employers (ALE). ALEs are employers with 50 or more full time equivalent employees (at least 30 hrs. per week) and subject to the ACA “play or pay” rules. IRS will use this reporting to determine if an employer will face a penalty for not offering affordable coverage. This reporting will also assist the employees and the IRS in determining eligibility for the premium tax credit.

Required Forms for Reporting – Focus on Applicable Large Employers (ALE)

Draft Form 1094-C– This form is the “Transmittal” form to the IRS that gives a summary of the employer data for the prior calendar year (2015, reported in 2016). Counts of full-time and total employees and an indicator of the ALE’s offer of minimum essential coverage are provided broken out for each calendar month http://www.irs.gov/pub/irs-dft/f1094c–dft.pdf

Draft Form 1095-C– This form is an individual statement describing the benefits that were offered to the employee during the prior calendar year (similar to a W-2). This statement details on an employee-specific level if coverage was offered and the cost of the lowest-cost offered coverage, broken out on a monthly basis. Two copies of this form will be completed for each full-time employee: One will be sent to the employee and one will be submitted to the IRS http://www.irs.gov/pub/irs-dft/f1095c–dft.pdf

What information is required on Form 1094-C & Form 1095-C?

Employers should establish a process for obtaining and tracking required information for each full-time employee on a monthly basis. Now is the time to start working with your benefits administrator or HRIS system support team to ensure you have the correct data captured. Specific employer and employee data, including required indicator codes, can be found in the Instructions for Forms 1094-C and 1095-C.

Timing of Reporting

Transition relief was previously given for 2014 and reporting for this period is not required. For calendar year 2015, the information reporting deadlines are as follow:

• Reporting – Forms 1094-C and 1095-C must be filed with the IRS by February 29, 2016 (or March 31, 2016, if filing electronically).  Form 1095-C is due to individuals by January 31^st of each year (February 1^st for 2016). This timing coincides with W-2 filing.
• Electronic filing for Forms 1094-C is required, except for employers with fewer than 250 returns during a calendar year.

These deadlines apply to all plans, even if they are not calendar year plans.