The IRS has issued new guidance and forms related to the Affordable Care Act over the past few months.  Following is a brief summary.

The penalties for applicable large employers (ALEs) which don’t offer insurance have been deferred until 2016. An ALE is an employer with more than 50 or more full time (equivalent) employees (FTEs).  If you have more than 100 FTEs, you may be subject to the penalty in 2015.  However, reporting requirements which have over 50 FTEs has not been deferred.  You will still have to report all of the same information for the year 2015, even though you will not have a penalty for not offering affordable, credible coverage.

In August the IRS issued draft forms and draft instructions in relation to the reporting that will come along with the insurance part of the mandate.  There are new Forms 1095-A, B and C, and also a 1094-C.  These forms will be similar in nature to a Form 1099 or W-2 with due dates in January/February of the following year.

Employers will have to assemble a plethora of information in order to properly prepare these new forms.  This information will need to be tracked by month if you are an ALE.  Even if you are not an ALE, but are offering insurance, there are reporting requirements.  The reporting requirements are effective for the year 2015 (due January/February of 2016).

Any employer, even if not an ALE, offering insurance will have to report the following information for covered individuals; status of each employee (full time, part time, or variable), average number of monthly hours worked during the measurement period for all employees, and number of FTEs by month.

For an ALE the reporting includes:

  • Names
  • Social Security numbers
  • Number of months covered for each covered life on the plan
  • Number of total covered lives
  • Whether coverage meets minimum essential coverage and
  • The employee’s share of the lowest cost for monthly premium for self-only coverage

If an employer has a self-funded plan, there may be additional information needed as well.

Individual Mandate

All individuals are subject to the insurance mandate this year.  Your tax preparer will need to know several new pieces of information to complete your 2014 Form 1040.  This includes a copy of any Form 1095s you may receive.  If you don’t receive a Form 1095, we will need to know who your health insurers were for the year, number of months of coverage, members of your family under that coverage, and if you received a premium assistance credit from the health care exchange, and if so what amount.  Once we have final forms, we will have more questions for you on other items we may need to assure that you are not subject to a penalty for not having insurance.

Ketel Thorstenson is available to guide you through this complicated subject, answer any questions in regards to the ACA, and help with reporting requirements.