As an employer, the number of employees in your business will impact what you need to know about the Affordable Care Act (ACA). Beginning in 2015, Applicable Large Employers (ALEs) will be subject to the Employer Shared Responsibility provisions under the Affordable Care Act and thus be subject to additional reporting requirements. An applicable large employer is an employer that employed an average of at least 50 full-time employees during the preceding calendar year.
Effective for the calendar year 2015, ALEs must file an annual return in 2016 reporting whether or not they offered health insurance and what kind of insurance was offered. This requirement applies to all applicable large employers, regardless of whether they offered health coverage to all, none or some of their full-time employees. An ALE will satisfy their reporting requirement by filing Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, and Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns with the IRS by Feb. 28 of the year immediately following the calendar year to which the return relates. In addition, the ALE must provide statements to their full-time employees, by Jan. 31, outlining the same information reported to the IRS. The IRS and the employees of an applicable large employer will use the information provided as part of the determination of whether an employee is eligible for the premium tax credit.
Employers who are self-insured, regardless of whether or not they are an ALE, must report information to the IRS about the health coverage they provide. Combined reporting is permitted by applicable large employers reporting both as an applicable large employer and as the provider of a self-insured plan.
In addition to basic identifying information, such as names and Social Security numbers of employees, spouses, and dependents and the name and employer identification number of each company, employers must also track and report the following information on their annual filings:
- the number of full-time employees who are employed by the company each month;
- the number of full-time equivalent employees who are employed by the company each month;
- whether and why the company is eligible for 2015 transition relief (the company employs between 50 and 99 full-time employees);
- for each employee, whether they, and, as applicable, their spouses and dependents, were offered minimum essential coverage providing minimum value for each month during the year; and
- each employee’s share of the monthly premium for the lowest cost, self-only (minimum value) coverage for each month.
Although the first transmittals will not be filed until 2016, the information is required to be compiled on a month-to-month basis. Therefore, it is critical that employers are developing plans and procedures for collecting and documenting information that will be required in order to comply with the 2016 filing requirements. An ALE that fails to fulfill their reporting requirements may be subject to penalty. If you have any questions or would like to learn more about applicable large employers and their reporting responsibilities, don’t hesitate to call us at 513-483-6699.