Under the Affordable Care Act, employers with 50 or more full-time equivalent employees are required to submit informational reporting about their employee health care coverage to the IRS. To help businesses comply with this requirement, Aflac has outlined the details you need to know:
Is my business an applicable large employer?
Applicable large employers (ALEs) are those with 50 or more full-time equivalent employees. To determine if your business is an ALE, you need to account for full-time (employees working 30 hours per week) and full-time equivalent employees.
To get a yearly number, the FTEs for 12 calendar months are averaged.
Note: Applicable large employers (ALEs) with self-funded major medical plans are also required to report that their plans meet the minimum essential coverage standards. To learn more, see: Information Reporting of Minimum Essential Coverage.
Section 6056 requires ALEs to submit IRS Form 1095-C (an employee statement) and Form 1094-C (a transmittal). The report should include the employer’s information, as well as information surrounding their benefits coverage options, and workforce demographics. Specifically:
The employer must also provide a written statement to the covered individual, which includes:
Similar to the applicable W-2 reporting deadline, statements should be provided annually to employees by Jan. 31. Forms must be provided to the IRS by Feb. 28 (March 31 if filed electronically) for the previous calendar year.
To satisfy the Section 6056 reporting requirements, ALEs are required to provide the IRS with Form 1094-C, which is the transmittal form, and Form 1095-C, which is the employee statement. A separate employee statement is required for each full-time employee, and a single transmittal may be used for all of the returns filed for the calendar year. Draft forms are expected to be available from the IRS as the reporting deadline approaches. Additionally, employers with 250 or more W-2s are required to submit the form electronically.
Yes, the law allows employers to use a third party to assist businesses with filing IRS reporting and providing statements to individuals insured by the health plan.
Currently, employers may face penalties for not filing informational reporting. However, the law explains that these fines may be waived for employers that do not file due to reasonable cause, or reduced for errors that are corrected in a timely manner that are not due to reasonable cause.
The Internal Revenue Bulletin: https://www.irs.gov/irb/2013-40_IRB
Final Treasury Regulations: http://www.gpo.gov/fdsys/pkg/CFR-2014-title26-vol18/pdf/CFR-2014-title26-vol18-sec301-6056-1.pdf
To learn more about reporting requirements, read W-2 reporting of employer-sponsored health care, Information Reporting of Minimum Essential Coverage or visit http://www.aflac.com/health-care-reform/.
This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.