2015 ACA Reporting Requirements Summary for Employers

Shelby Hammond

  1. W-2 Reporting of health care premiums paid by employers:
    1. Who must report?
      1. Employers who issued at least 250 W-2s for the preceding calendar year.
      2. Union employees in a multiemployer union plan count in determining whether or not you issued at least 250 W-2s in the prior calendar year, BUT you are not required to report the cost of health care that was provided through the multiemployer union plan as W-2 premium reporting is suspended indefinitely for employers covered under multiemployer plans.
    2. What must be reported?
      1. Employer and Employee contributions for major medical and prescription drug coverage.
      2. The link under part “d” provides a chart showing which coverage types must be reported, should not be reported, and are optional.
    3. When and Where to report?
      1. This reporting went into effect for tax year 2013. The health care premiums must be reported on the W-2s in box 12, using code DD and the W-2s must be sent to the employees by January 31st of subsequent year.
    4. More information is available here
    5. Section 6056 Reporting – Applicable large employer health coverage reporting:
    1. Who must report?
      1. Applicable large employers (ALE’s). An employer qualifies as an ALE if it employed an average of at least 50 full-time employees, including full-time equivalents, on business days during the preceding calendar year. Full-time employees are those employed on average for at least 30 hours of service per week. See the appendix on page 4 for a detailed explanation of the calculation of full-time equivalents for determining ALE status.
      2. Employers that are commonly owned or have a brother-sister relationship with other employers must be considered together for the qualification as an ALE. Details of these requirements can be found in the link under part “d.”
      3. Section 6056 reporting related to full-time employees eligible to participate in a multiemployer plan may be provided in a bifurcated manner. Under this approach, one return, filed by the multiemployer plan administrator, would pertain to the employees eligible to participate in the multiemployer plan and a separate return filed by the employer would pertain to the remaining full-time employees who are not eligible to participate in a multiemployer plan.
      4. Please note that even if the 6056 reporting is not required due to the number of employees (the employer is not considered an ALE), section 6055 reporting (part 3 below) will be required if the employer has a self-insured health plan.
    2. What must be reported?
      1. The Employer must file a Form 1095-C for each full-time employee and provide a copy to the employee, similar to a W-2 or a 1099.
      2. The Form 1095-C will include basic information such as the employer’s name, address, EIN, telephone number of the employer’s contact person;
      3. The Form 1095-C will also include:
        1. a certification as to whether the employer offered its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage, by calendar month;
        2. The months during the calendar year for which minimum essential coverage under the plan was available;
        3. Each full-time employee’s share of the lowest cost monthly premium (self-only) for coverage providing minimum value offered to that full-time employee under an eligible employer-sponsored plan, by calendar month;
        4. Any other information required by the IRS.
      4. The Forms 1095-C are transmitted to the IRS with a 1094-C transmittal form, which will also report the total number of full-time employees for each month during the calendar year;
    3. When and where to report?
      1. The first section 6056 reporting required is for the 2015 calendar year and forms must be filed in 2016.
      2. The Form 1095-Cs must be furnished annually to the full-time employees on or before January 31st of the year immediately following the calendar year to which the employee statements relate.
      3. The Form 1095-Cs must also be filed annually with the IRS along with the 1094-C no later than February 28th of the year immediately following the calendar year to which the return relates.
    4. More information is available here
  2. Section 6055 Reporting – Reporting of health coverage by health insurance issuers and sponsors of self-insured plans:
    1. Who must report?
      1. Health insurance providers, including employers with self-insured health plans, without regard to the number of employees.
      2. The Plan Sponsor is responsible for section 6055 reporting for a self-insured group health plan. In general, the plan sponsor is the entity that establishes or maintains the plan. The employer is the plan sponsor for self-insured group health plans established or maintained by a single employer. For a multiemployer plan, the plan sponsor is the association, committee, joint board of trustees or other group of representatives who establish or maintain the plan.
      3. Section 6055 reporting is not required for supplemental coverage such as HRA’s, on-site medical clinics, HSA’s, and wellness programs.
    2. What must be reported?
      1. The name, address and EIN of the reporting entity;
      2. The name, address and TIN of the primary insured and each other individual covered (spouses, dependents) under the policy or plan;
      3. The dates each individual was covered under the policy or plan during the calendar year;
      4. For each covered individual, the months for which, for at least one day, the individual was enrolled in coverage and entitled to receive benefits; and
      5. Any other information required by the IRS.
      6. For group health plan coverage, including self-insured plans, the following information must also be provided:
        1. Name, address, and EIN of the employer sponsoring the plan; and
        2. Whether the coverage is through the SHOP Exchange (and if so, the SHOP’s unique identifier).
    3. When and Where to report?
      1. The first section 6055 reporting required is for the 2015 calendar year and forms must be filed in 2016.
      2. If the entity is also an ALE (from part 2 above), the information is combined on the 1095-C and 1094-C forms.
      3. Otherwise, the reporting entity must provide a Form 1095-B to covered employees, and transmit those 1095-Bs to the IRS with a 1094-B transmittal.
      4. The Form 1095-Bs must be furnished annually to the covered employees on or before January 31st of the year immediately following the calendar year to which the employee statements relate.
      5. The Form 1095-Bs must also be filed annually with the IRS no later than February 28th of the year immediately following the calendar year to which the return relates.
    4. More information available here.

APPENDIX: Calculating Full-Time Equivalents

  •  Only Applicable Large Employers (ALEs) are required to report health coverage information under Section 6056.
  •  Applicable Large Employers are defined as those employers who employed an average of at least 50 full-time employees on business days during the preceding calendar year. However, full-time equivalents must also be considered and can count towards the 50 employees.
  • Internal Revenue Code section 4980H(c)(2)(E) explains how to calculate a full-time equivalent solely for the purpose of determining ALE status, and there are four specific steps.
  • STEP A: For each month in the preceding calendar year, calculating the number of full-time employees, including seasonal employees, for each calendar month. This number includes all employees who were employed on average at least 30 hours of service per week for the calendar month.
  • STEP B: Calculate the aggregate number of hours of service for that same month for all employees not counted in STEP A (anyone less than 30 hours of service per week on average for the month). Divide this number by 120 and keep the fraction to the nearest one hundredth.
  • STEP C: Add the number of full-time employees in STEP A and the number of full-time equivalents in STEP B for each of the 12 months of the preceding calendar year.
  • STEP D: Add up the 12 monthly numbers in STEP C and divide by 12. If the result is not a whole number, the result is then rounded to the next lowest number. For example, a monthly average of 49.9 full-time employees (including FTEs) for the preceding calendar year may be rounded down to 49.
  • There is an exception for certain seasonal employers if they meet the following criteria, but if the employer is not seasonal then seasonal employees are still counted in STEPs A&B above.
    • The employer’s workforce exceeds 50 full-time employees for 120 days or fewer during the calendar year, and
    • The employees in excess of 50 employed during that 120-day period were seasonal workers.
    • Seasonal workers are defined very specifically as workers who perform labor or services on a seasonal basis as defined under DOL Reg Section 500.20(s)(1) which relates to employment that is exclusively performed during certain seasons or periods of the year and cannot be carried on continuously through the year and normally relates to agriculture workers, though can be interpreted in good faith if it applies in other industries. Seasonal workers also include retail workers employed exclusively during the holiday seasons, though which holidays are not defined.

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