Tax News Highlights: Affordable Care Act Reporting Requirements for Large Employers

| 8/28/2014

The IRS recently released drafts of the information reporting forms that large employers subject to the employer mandate of the Affordable Care Act will be required to file. The forms will be required for calendar year 2015 and will be due to the IRS in early 2016.

Large employers, generally defined as those with 50 or more full-time-equivalent employees, will be required to provide Form 1095-C, “Employer-Provided Health Insurance Offer and Coverage,” for each full-time employee to report the following information:

  • Whether or not that employee is being covered by employer-provided health insurance
  • The type of health insurance coverage provided
  • The employee’s share of the lowest-cost monthly premium
  • How many months the employee (and any family members or others covered by that employee’s policy) was covered during the calendar year

Small employers who purchase health insurance for their employees are not required to report any information. Instead, health insurance companies will be responsible for reporting the required information for employees of small employers. However, small employers that sponsor self-insured health plans will have to provide a Form 1095-B, “Health Coverage,” to each primary insured. Form 1095-B shows the months during the calendar year that the insured and family members were covered under the plan.

These information reporting forms will have filing dates identical to those of other information reporting forms (such as Forms W-2 and 1099). Forms 1095-B and 1095-C must be provided to employees by Jan. 31 of the subsequent year. The forms must be transmitted to the IRS using new transmittal forms (Form 1094-B, “Transmittal of Health Coverage Information Returns,” and Form 1094-C, “Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns”) by Feb. 28 (or March 31 if filing electronically).

There also will be an electronic filing mandate similar to the mandate for filing Form W-2 electronically. It remains to be seen if the proposed information reporting requirements ultimately will be implemented. Nevertheless, businesses should begin the process of evaluating their ability to comply.

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