January 7, 2016

One Final Refresher on the Affordable Care Act Requirements for 2015

by: Kevin Stedman

Our original post on the Affordable Care Act was written in September 2015 and covered many FAQ’s and scenarios for businesses that may have to comply.  The following is an update to that post:

Beginning this month, Internal Revenue Code (IRC) Section 6056 requires Applicable Large Employers (ALEs) to file information returns with the Internal Revenue Service (IRS) to report applicable healthcare information. An ALE must file Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, for each full-time employee, and the related Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. In addition, employers of all sizes will have a reporting requirement under IRC Section 6055 if the employer self-insures. These reporting requirements help administer the employer shared responsibility mandate and the individual mandate added as a part of the Patient Protection and Affordable Care Act.

Who Needs to File?

  • Employers with 50 or Full Time More Employees
  • Small Employers with Fewer Than 50 Employees That Are Members of a Controlled or Affiliated Service Group who have collectively more than 50 Full Time Employees
  • Employers with Employer-Sponsored Self-Insured Plans

What Are the Filing Deadlines?

Form 1095-C – March 31, 2016.

Form 1094-C (and copies of each Form 1095-C) – May 31, 2016, or by June 30, 2016 if filing electronically.

What Are the Fines and Penalties for Not Complying with the Reporting Requirements?

Employers who fail to report will be subject to fines. The penalty is $100 per violation, up to a maximum of $1.5 million per year. However, employers that report within 30 days of the deadline will be fined $30 per violation. Those that file within five months of the deadline will be fined $60 per violation. The penalties will increase to $250 per violation next year, with a maximum of $3 million per year, with $50 per violation if filed within 30 days, and $100 per violation if filed after 30 days.  Entities that intentionally disregard the reporting requirements face a penalty of $250 per violation this year and $500 per violation in 2016, with no cap on the potential liability.

What Actions Should an Employer Take to Prepare?

Given the complexity of information required to be reported and the potential size and impact of the penalties, employers need to ensure that adequate procedures are in place for determining and documenting each employee’s full-time or part-time status month-by-month, as well as procedures to collect information about health coverage and enrollment month-by-month.  For those employers in which the reporting requirements apply, make sure you have discussed your responsibilities with your plan administrator or payroll vendor and that there is a plan for the applicable forms to be prepared and filed.

Should you have any questions on your responsibilities or need assistance in preparing these forms, please reach out to your Hobe & Lucas representative by calling 216.524.8900.  You can also refer to our previous blog post.

Hobe & Lucas Certified Public Accountants, Inc. is a full-service accounting and business consulting firm dedicated to providing clients with exceptional value.

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