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 | BORISLOW INSURANCE
Way Beyond Brokerage |
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Time to Act Now: IRS Releases 2015 Forms and Instructions for 6055/6056 Reporting
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Background
Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance while applicable large employers (ALEs) are required to offer health benefits to their full-time employees. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers (including ALL self-insured plans) will be required to report on the health coverage they offer. Final instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in September 2015, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C.
Who Must File?
The instructions clarify that all ALE's (employers with 50 or more employees) must file one or more 1094-C forms (including the designated authoritative transmittal) and a 1095-C for each employee who was a full-time employee for any month of the calendar year.
When?
Reporting will first be due early in 2016, based on coverage in 2015. All reporting will be for the calendar year, even for non-calendar year plans. The reporting requirements are in Sections 6055 and 6056 of the ACA. Draft instructions for both the 1094-B and 1095-B, and the 1094-C and 1095-C were released in August 2015. The final instructions have some substantial differences from the draft instructions.
How?
Consider the ACA reporting requirement to be a new corporate tax filing requirement providing information on the health coverage you offer to your employees. Similar to the separate Form W-2, Wage and Tax Statement, filed by an employer for each employee, and the Form W-3, Transmittal of Wage and Tax Statements, filed as a transmittal form for the Forms W-2, a separate information return is required for each full-time employee. Forms 1095-C are filed accompanied by the transmittal form, Form 1094-C. As an employer, it is your responsibility to make sure you know if you need to complete these forms and who will complete them. Your payroll, benefits administration, or HRIS vendor and/or your accountant may have already reached out to you to discuss your strategy on completing these forms. If you do not know how you will meet this employer reporting obligation, please contact compliance@borislow.com for further guidance on vendors that may assist you.
Penalties
The instructions incorporate the new penalties for failing to file information returns i.e. W2s and forms required under section 6055 and 6056, which are now $250 for each return that an employer fails to file. The IRS noted that, for 2015 reporting, penalties will not be imposed for incorrect or incomplete information filing so long as the employer can show it made a good faith effort to comply with the requirements. The "grace period" does not apply to employers that fail to file or that file late.
To learn more about the final forms and the reporting requirement, please download the following PDF: IRS Forms and Instructions. We acknowledge that this is a lot of information and feel it is important that you have this as a reference guide to the biggest federal tax changes in the last 25 years.
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Please Note:
This information is general and is provided for educational purposes only. It reflects UBA's understanding of the available guidance as of the date shown and is subject to change. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors. September 22, 2015.
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Borislow Insurance
One Griffin Brook Drive
Methuen, MA 01844
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