ACA rundown: deadlines and deliverables

New Internal Revenue Service reporting deadlines for the Affordable Care Act are just around the corner – and they should be on the radar of all municipal employers.
 
MIIA recently held two intensive training sessions where municipal representatives were provided with an overview of what new forms are required, filing responsibilities, deadlines and penalties.
 
The following are key issues to consider, as well as important dates:
 
What are the new IRS reporting requirements?
 
The ACA added two new sections to the Internal Revenue Code.
 
Section 6056 requires employers of 50 or more full-time (30-plus hours per week) employees (or full-time equivalents) to report on the coverage they are offering employees, with the purpose of determining whether those employers have satisfied their obligation to provide coverage under the “employer mandate” and establishing whether the employees are eligible for subsidized coverage through the Exchange.
 
Section 6055 requires coverage providers to identify the subscribers (and dependents) to whom they provide coverage. This information will enable the IRS to enforce the “individual mandate,” which requires individuals to enroll in coverage – unless eligible for an exemption – or face penalties.
 
What forms must be filed, and who must file them?
 
Section 6056 deals with the requirements of the employer mandate. Forms 1094-C and 1095-C must be filed by every employer that is subject to the employer mandate (i.e., those that employ 50 or more full-time employees or full-time equivalents).
 
Form 1095-C must be prepared for every individual who was a full-time employee (30-plus hours per week) of the employer for any month during the applicable calendar year. Generally, a copy of Form 1095-C must be delivered to each individual and must also be filed with the IRS, together with Form 1094-C, which serves as a transmittal form.
 
Section 6055 deals with the requirements of the individual mandate. Form 1095-B and Part III of Form 1095-C establish that an employee and each of her/his named dependents had coverage as well as the months they were covered. Whether that information will be reported by the coverage provider on Form 1095-B or by the employer in Part III of Form 1095-C will depend on the type of coverage an employer provides.
 
For more information regarding which forms your community will be required to provide, visit the ACA resources page on MIIA’s website (www.emiia.org/health-and-dental-insurance/affordable-care-act), where a more detailed version of this article is posted.
 
Many payroll providers and payroll software providers are offering assistance with completing the requisite forms. It is crucial that municipal representatives contact their health insurance provider and payroll provider to determine what assistance they can expect with the completion and filing of these forms.
 
What are the reporting deadlines?
 
To employees/subscribers: Employers must provide the employee and, where required, the subscriber with a copy of her/his Form 1095-C on or before Feb. 1, 2016.
 
To IRS: Employers must file a copy of Form 1095-C for each employee and, where required, for each subscriber, together with the transmittal Form 1094-C, on or before Feb. 29, 2016, unless the employer is filing electronically, in which case the deadline is March 31, 2016.
 
Employers filing 250 or more forms 1095-C must file electronically.
 
Are employers with fewer than 50 full-time employees or full-time equivalents subject to any reporting requirements?
 
These small employers are not subject to the employer mandate, so they are not required to file forms 1094-C and 1095-C. Reporting is still required regarding individuals who are enrolled in the coverage they offer.
 
This enrollment information regarding subscribers must be reported on forms 1094-B and 1095-B. In most cases, these forms will be completed by the insurance carrier or other provider of insurance. If a small employer is self-insured or part of a self-insured JPA, however, the employer is required to complete and file these forms.
 
For more information regarding small employers information reporting, visit the ACA resources page on MIIA’s website (www.emiia.org/health-and-dental-insurance/affordable-care-act).
 
Are there penalties tied to reporting?
 
The IRS can assess substantial monetary penalties for failure to file forms in a timely manner with the IRS and deliver forms to individuals, and for providing incorrect information on forms. The IRS has indicated that it will offer relief from these penalties in 2016 in cases where forms include incorrect or incomplete information, but only if the employer has shown a good faith effort to comply. No relief will be extended to employers that fail to file the required reports by the deadline.
 
Any additional considerations?
 
For answers to other common questions about the new ACA requirements – such as how to calculate the number of full-time employees, specific requirements for serving the appropriate forms to individuals, and what coverage qualifies as “affordable” – visit the ACA resources page on MIIA’s website (www.emiia.org/health-and-dental-insurance/affordable-care-act).
 
Chris Bailey is Manager of MIIA’s Health Benefits Trust.