Get Ready to Report – 2015 ACA Requirements for Applicable Large Employers
October 28, 2015
By Tommy Lee, partner; Anita McBurney, senior manager; and Bob Carreker, senior manager
The Affordable Care Act (ACA) is officially here, and now’s the time to begin gathering data to comply with the ACA’s requirements. If you’re an employer with over 50 full-time equivalent employees, you have reporting requirements for 2015 due in January of 2016. If you have less than 50 full-time equivalent employees but you’re close, you too should start gathering data now to be prepared.
So what are you required to report and what data should you be collecting? This article will cover the four key reporting requirements and who can qualify for simplified reporting.
Reporting Requirements for Applicable Large Employers
1. Provide notice of coverage by Oct. 1.
As reporting requirements go, this one is pretty simple. Every employer must provide a notice of coverage at the time of hiring, and the notice of coverage needs to be retained in the employee’s file.
“Notice of coverage” is defined as a written notice that includes information regarding the existence of the Health Insurance Marketplace as well as contact information and a description of services provided by the Marketplace. The notice of coverage must also information the employee that he or she may be eligible for a premium tax credit under section 36B of the Internal Revenue Code if the employee purchases a qualified health plan through the Marketplace and that he or she may lose the employer contribution to any health benefit plan offered by the employer.
The Department of Labor provides sample language and templates of the notice on their website that you can use.
2. Use Form 1095 and Form 1094
All applicable large employers must report using Form 1095 and Form 1094. Both forms are available on the IRS website.
3. 1095 reporting (IRS section 6055 – Reporting of Health Coverage by Health Insurance Issuers and Sponsors of Self-Insured Plans)
This is where your reporting can get tricky. Form 1095-B (Health Coverage) needs to be reported for each covered employee in an insured plan and Form 1095-C (Employer-Provided Health Insurance Offer and Coverage Insurance) for each covered employee in a self-insured plan. These returns need to be filed no later than Jan. 31, 2016 (the same as W-2s), with a copy sent to the IRS and a copy sent to the employee. Both forms cover employee-specific information. In the case of the 1095-C, you’ll need:
- The employee’s valid social security number (which can be truncated to the last four digits on forms sent to employees but must be untruncated on form sent to the IRS);
- The months for which the employer offered coverage to the employee;
- The type of coverage offered (self only or family); and
- The employee’s share of the lowest cost monthly premium for self-only coverage offered under an employer-sponsored plan. 
4. 1094 reporting (IRS section 6056 – Large Employer Health Coverage Reporting
Form 1094-C is used to report employer summary information to the IRS; in other words, it summarizes all the 1095s. You must use a valid employer identification number, which cannot be truncated. The form also requires:
- Certification of whether the employer offered employees and their dependents an opportunity to enroll in minimum essential coverage under an employer-sponsored plan;
- The months during the calendar year that minimum essential coverage was available under the plan; and
- The number of full-time employees for each month during the year.
Returns must be filed by March 31, 2016 if filed electronically with the IRS, and employers with over 250 forms are required to file electronically. If you file using paper, the forms must be filed by the last day of February.
|Form||Purpose||Prepared By||Filed With||Due Date|
|1095-B||The 6055 EE reporting for full-insured plans||Insurance provider||IRS and to EEs||January 31|
|1094-B||Transmittal for the B forms||Employer|
|1095-C (Parts I and II)||6056 ER reporting for insured plans||Employer||IRS||March 31|
|1095-C (All Parts)||6055 & 6056 reporting for self-funded plans||Employer||EEs
|1094-C||Transmittal for the 1095-C||Employer||IRS||March 31|
Simplified Reporting – Who Qualifies and What Methods?
You can qualify for simplified reporting if you make a “qualifying offer” to one or more full-time employees. A qualifying offer is defined as an offer of minimum essential coverage providing minimum value (which is met when a plan pays 60 percent of the actuarial value of allowed benefits under the plan) with employee contributions for self-only coverage equal to or less than 9.5 percent of the mainland single federal poverty line, as well as an offer of minimum essential coverage or something better to the full-time employee’s spouse and dependents.
If you certify that you made a qualifying offer, you do not need to complete the section of the 1095-C which requires the employee’s share of the lowest cost premium. Additionally, if you make a qualifying offer for all 12 months in the year, you can avoid filing the 1095-C and instead provide a generalized statement indicating that the employee and his/her spouse and dependents received a qualifying offer for all 12 months and are thus not eligible for a premium tax credit.
You can also make use of the “98% Offer Method,” which permits employers to report without identifying the full-time employees or specifying the total number of full-time employees. In order to qualify, you must offer minimum essential coverage that is affordable and meets minimum value to at least 98 percent of the employees for whom you are filing a Form 1095-C.
Have further questions on the ACA reporting requirements? Unsure if you’re considered an applicable large employer? Contact Tommy Lee at [email protected] or 770-353-7170, Anita McBurney at [email protected] or 404-403-6204, or Bob Carreker at [email protected] or 770-353-5084.
Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.
 Most small and large plans meet the minimum essential coverage requirements. Click here for a chart that will assist in determining if your plan is a MEC plan.
About the Author
Tommy is the partner-in-charge of Aprio's Retail, Franchise and Hospitality group. His practice focuses on small and mid-sized retail, franchise and hospitality companies and real estate firms. Tommy has expertise in corporate structuring arrangements, multi-state and international tax planning, and corporate and individual tax mitigation.