ACA Reporting – Deadlines extended
- On Dec. 28, 2015, the IRS issued Notice 2016-4, delaying the due dates for ACA reporting.
- This reporting requires that applicable forms are delivered to both the IRS and individuals.
- The due date for furnishing forms to individuals has been extended from Feb. 1, 2016, to March 31, 2016.
- The due date for filing forms with the IRS has been extended from Feb. 29, 2016, to May 31, 2016 (or, from March 31, 2016, to June 30, 2016, if filing electronically).
- Section 6055- Health plan or minimum essential coverage (MEC) reporting.
- Supports the Individual Mandate: reporting will provide proof to subscribers of enrollment in coverage.
- Applies to providers of minimum essential coverage, such as health insurance issuers and employers with self-insured health plan.
- Section 6056- applies to applicable large employers (ALEs).
- Supports the Employer Mandate; reporting will communicate to the IRS how the ALE is responding to the requirement to provide coverage, and also provide documentation of this response to all full-time employees.
- Generally applies to employers with 50+ full-time employees.
We have been hearing from a lot of employers who are in the phase of auditing their1095-C statements. They are wondering if they’re doing it right, whether they have produced them in-house or through a third party payroll vendor.
We are seeing many questions based around the 1095-C statements, for example, “I’ve got this 1095-C for this employee and it is using Code IE, is that the right code?” We know you are all neck deep in 1095-C statements, and if you have specific questions please reach out to one of your TPG team members who can help you decode the confusion generated by these forms.
FORM 1094-C, Line 22 — Overview
- Certifications of Eligibility
- Qualifying Offer Method
- Qualifying Offer Method Transitional Relief
- Section 4980H Transition Relief
- 98% Offer Method
- Employers aren’t required to check any boxes
- Employers can check more than one box
FORM 1094-C, Line 22 — Rules of Thumb
- Section 4980H Transition Relief
- Almost every employer will check this box
- It indicates that the employer either had an employee count of 50-99 in 2014 or is eligible for the 70% rule in 2015
- No/reduced penalty exposure for 2015
- Other codes are more employer specific
FORM 1095-C, Lines 14-16 — Overview
- These lines are used to show the IRS:
- Whether a full-time employee could have enrolled in employer-provided health coverage in 2015 and
- Whether that coverage is “affordable”
- Goal is to determine exposure for pay or play penalties
- These lines are not used to show the IRS:
- Actual enrollment for purposes of the individual mandate
- That information comes from the “B Forms” for insured plans and Part III of the “C Forms” for self-insured plans
FORM 1095-C, Lines 14-16 — Rules of Thumb
- Line 14:
- This line is used to indicate which months an employee received an offer of coverage
- The most common codes are 1A and 1E
- 1A is used if the employee-only cost of individual-only coverage did not exceed $93.18 per month
- 1E is used if it did exceed $93.18 per month
- Other codes apply where there was no offer of coverage and for certain types of union coverage
- Line 15:
- Used to show affordability
- Only necessary with particular line 14 codes
- Line 16:
- Use 2C if an employee is enrolled in coverage
- Insert safe-harbor code if applicable
- Okay to leave blank
ACA Reporting Enforcement
- For 2015 forms, a good-faith effort will suffice
- Good news! For those employers who are working hard to follow the rule of the reporting requirements, your good-faith effort for 2015 is really going to suffice. You don’t need to lose sleep over the fact that your report may not be absolutely perfect. We really don’t believe there is going to be a lot of fines levied against employers who can demonstrate they did everything they could to follow the Rules of 2015. However, we may not have that same grace in 2016 and moving forward.
- Subject to waiver and reduction, penalty amounts are:
- $250 per return, up to $3,000,000
If you have any further questions, please feel free to contact us.