It’s hard to believe, but we’re less than six months away from 2015. That means employers will soon be grappling with a host of new reporting requirements under the Affordable Care Act (ACA). The IRS delayed the requirements for a year, but issued their final regulations in March of this year. Employers will now be required to gather data beginning in 2015 and submit the first set of informational returns in 2016. On July 24, 2014, the IRS issued draft forms for employers to transmit the required data.
Here are some of the highlights …
If you offer a self-insured plan, you’ll be required to submit annual returns to the IRS identifying who is covered. If you offer a fully insured group health plan, the health insurance issuer is required to submit the returns. You’ll need to make sure each employee gets a copy of the return by January 31, 2016, and that you submit all returns on Forms 1094-C and 1095-C with the IRS by February 28, 2016 (if filed on paper - March 31 if filed electronically). Some of the data you’ll need to keep track of and report includes:
- Employer’s name, address, employer identification number (EIN), and a contact person
- Name and social security number (SSN) – or date of birth if SSN is not available – of each employee and each spouse or dependent of the employee who is covered
- The months of the calendar year during which each individual was covered
- Full-time and total employee counts by month
- Whether the employer is part of an aggregated group at any time during the year
Large employer plans
If you’re a large employer subject to the “play or pay” requirements, you’ll be required to report annually to the IRS on any employee who was full-time for one month or more (working an average of 30 hours per week or 130 hours per month), whether that person was offered health coverage, and if so, the lowest amount the employee could pay to get coverage that meets the minimum value requirements.
Large employers have a few options when it comes to reporting. Under the general method, a return must be filed for each employee who is full-time for one month or more during the calendar year. Large employers also have two optional reporting methods:
- Qualifying offer method. This method eliminates the need to report month-by-month information for employees who received a "qualifying offer" for all 12 months of the year. The employer must still report identifying information for each employee, regardless of whether he or she receives a qualifying offer. For those who don’t receive such an offer for all 12 months of the year, the employer must report all the information required month by month under the general method. For 2015 only, large employers can further simplify their reporting obligations by certifying that they made a qualifying offer to at least 95 percent of their full-time employees and dependents.
- Ninety-eight percent offer method. This method is available to large employers that certify that they offered affordable, minimum value coverage to at least 98 percent of their employees and their dependents.
It’s crunch time
Given the complexity of the new reporting requirements, the level of data required to comply, and the fact that time is running out, employers will need to work quickly to make sure the appropriate systems and processes are in place by the end of the year to capture all of the required data beginning in 2015.
For more details about the new reporting requirements, visit the IRS website.