The new year is on the way and that means that it’s time for employers to turn their attention to the IRS reporting requirements of the Affordable Care Act. This is a complex piece of legislature and it comes with it’s own complete set of IRS regulations.
Depending on the size of your business and the types of health insurance plans that you are offering to you employees, you may be required to file. Let’s break down the basics as we look at who needs to file, why they need to file, and when they need to file! Stay tuned to stay IRS compliant!
Section 6056…The Requirement
So, all you know about the ACA is what the acronym stands for? You’ve come to the right place, if there is only one piece of information that you need to know, it’s section 6056. This is the section of the ACA that lays the foundation for mandated reporting.
If you have 50 or more full-time employees, then you are considered an ALE. This stands for applicable large employer, if you fit this description then you must file ACA Forms with the IRS.
Do you have more than 250 employees to report for? If so, then the IRS requires that you file electronically.
Am I An Applicable Large Employer?
So, we have already established that you are considered an ALE if you have more than 50 full-time employees. It’s not always that simple, here are a few factors to take into account when you are determining whether or not your business fits ALE status.
You need to think about you part-time staff. Are you a business that functions with a large amount of part-time workers in addition to your full-time staff?
For example, if you have 45 full-time employees…no filing for you! However, if you have also have 10 part-time workers that are averaging 15 hours a week, then you are now an ALE.
Are You Offering ACA Qualified Health Insurance?
If you are an ALE then you are required to offer your full-time employees a health insurance package. This package also must be up to the standards of the ACA. This standard is called minimum essential coverage, or MEC. To fulfill this requirement, you must be offering your employees coverage that costs them no more than 9.86% of their household income in a year.
When it comes to quality, the plan must be at least the equivalent of a bronze plan on the open market. The idea being that your employers should not be able to find a better deal in the healthcare open marketplace. If they do, then you will be penalized by the IRS.
Are You Reporting Correctly?
ALE’s must report their information correctly to avoid penalties. This information must be captured on the forms 1095-B and 1095-C. The main form to worry about is the 1095-C, this is where employers are required to provide codes that indicate what the employee’s health insurance coverage was throughout the year.
The 1095-C must be provided to every employee in the organization as a recipient copy. The IRS requires that employers send all of these 1095-C forms to them as well. The 1095-B is a cover page for the 1095-C’s, and should be included in the IRS transmission.
Know The Deadlines!
The easiest way to get slapped with an IRS penalty is to miss a filing deadline, don’t let that happen to your business!
March 2nd– This is the deadline to send 1095-C recipient copies to your employees.
February 28th– This is the deadline to paper file your forms with the IRS.
March 31st– This is the deadline for filing your forms electronically with the IRS.
Are you overwhelmed? ACAwise is here to help, we are a full service reporting solution. That means, you send us your employee health insurance information…and we generate the forms for you! We know all the codes that you need and we can guide you through every stage of the reporting process!