The Affordable Care Act Requirements

November 20, 2014


Under the Affordable Care Act, employers that offer (or fail to offer) health coverage are required under Code Section 6055 and Code Section 6056 to provide certain health insurance information to the IRS and to each individual employee. The information is required for calendar years beginning after December 31, 2014.

Specifically, Code Section 6055(a) requires every health insurance issuer, sponsor of a self-insured health plan, and other entities that provide “minimum essential coverage” to file annual returns reporting information for each individual for whom minimum essential coverage is provided. Check with your healthcare agent to find out if the “minimum essential coverage” applies to your company.

Reporting to the individual will assist them with the period of coverage detail which must be reported on their taxpayer return.

Code Section 6056 applies to larger employers, in general with at least an average of 50 full-time employees (including full-time equivalents) in the prior calendar year, and requires separate reporting with regard to its full-time employees to address the 4980H employer shared responsibility provisions. The reporting allows their employees to determine, for each month of the calendar year, whether they may claim a Code Section 36B premium tax credit on their individual tax returns. You should beware; all related entities of the employer are considered a single employer for determining the large employer status.

Employers that generally employed fewer than 50 full-time employees (including full-time equivalents) during the prior year are not required to report, again unless they offer a self-insured health plan or other minimum essential plan. An example of a full-time equivalent: 20 employees working 15 hours a week are considered 10 full-time employees working 30 hours a week. Accurate employee records to determine each employee’s status will be crucial.

The first filing for calendar year 2015 will be due with the IRS on February 29, 2016. However, the employee statements must be provided no later than January 31, 2016 (February 1, 2016 since January 31 falls on a Sunday).

Keep in mind, the filings must be prepared for each full-time employee regardless of whether they were offered coverage. The statement must include whether or not an offer of health coverage was made to the employee, and, if an offer was made, must include additional information about the offer.

You may contact your health insurance provider, or third party provider for more information about your coverage and reporting requirements. We will send a request to you in the fall of 2015 to find out if you want our assistance preparing the forms.

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