We have been receiving quite a few calls from our clients on the PPACA Employer Reporting Requirements for the 2015 tax filing. As you can imagine, there are number of factors that will ultimately determine whether or not you are responsible for reporting this information to the IRS. We wanted to provide you with some straightforward information that will hopefully assist you in making this decision.
Are you responsible for this reporting?
If you are currently offering a "Fully Insured" employer based health plan which meets the "Minimum Essential Coverage" provision of PPACA and you you employ, on average, over 50 full time employees and/or full time equivalent employees (FTEs) then you are responsible for reporting under
If you are currently offering a "Self Insured" employer based health plan which meets the "Minimum Essential Coverage" provision of PPACA and you you employ, on average, over 50 full time employees and/or full time equivalent employees (FTEs) then you are responsible for reporting under Section 6055.
Employers who employ, on average, 50 or more full time employees or full time equivalent employees (FTEs) are considered an Applicable Large Employer (ALE) by the IRS.
What tax forms are required under Section 6056 and 6055?
We received final guidance on the applicable tax forms back in February of 2015 - they are as follows:
Form 1095-C is a new form designed by the IRS to collect information about ALEs and the group health coverage, if any, they offer to their full-time employees. Employers will provide Form 1095-C (employee statement) to employees and file copies, along with Form 1094-C (transmittal form), to the IRS.
Form 1095-C is comprised of three parts:
Form 1094-C will be used to determine if an employer is eligible for alternative (simplified) reporting. Employers also will use this form to certify that the employer is eligible for transition relief under the ACA "play or pay" rules, if applicable.
- Part I: Identifying information about the employee and the employer.
- Part II: Information about the employer's offer of group health coverage.
- Part III: Information about the employer's self-funded health coverage (if any), including names and Social Security numbers of the employee and his or her covered dependents.
When does the new requirement begin?
The requirement first applies for calendar year 2015 with reports due in early 2016:
- 2015 Form 1095-C (employee statement): Due January 31, 2016.
- 2015 Form 1094-C (transmittal form with copies of Forms 1095-C): Due February 29, 2016 (or March 31, 2016, if filing electronically).
The due dates are the same as the due dates for Form W-2 for the same calendar year. If the due date falls on a weekend or legal holiday, the employer may file by the next business day.
Are there penalties for not reporting this information to the IRS?
Yes and the penalties may be substantial. For instance, the penalty is $250 for each failure to file a complete return and for each failure to provide a complete form to an employee (up to a maximum of $3,000,000). Lesser penalties may be imposed for reporting incorrect information provided the error is corrected within certain timeframes. Generally, the maximum penalties are reduced for ALEs with receipts less than $5,000,000.
For 2015, the IRS has indicated it will not impose penalties for reporting incorrect or incomplete information if the ALE can show that it made good faith efforts to comply. This relief is not provided, however, for ALEs that fail to file returns on time (including extensions).
OK, so who is going to help me with all of this reporting???
The short answer is Altruis Benefit Consulting, or course!
We are currently evaluating multiple Third Party Administrators (TPA's) that focus on PPACA employer based reporting and have established tools to assist in this process. We will assist with determining whether or not you are required to comply with the IRS reporting requirements for PPACA. If we determine that you are, we will prepare a proposal from our selected TPA to handle the reporting tasks from beginning to end!
As always, we sincerely appreciate the opportunity to assist you with your health insurance needs! You can contact the professionals at Altruis Benefit Consulting using the information below if you have any general concerns about your coverage, PPACA Reporting, or Health Care Reform in general. We look forward to hearing from you!