Calvetti Ferguson

ACA New Reporting Requirements

ACA New Reporting Requirements

Update:

The IRS issued Notice 2016-4 significantly delaying the reporting and filing deadlines for the forms referred to below. Specifically, Form 1095-C must now be provided on or before March 31, 2016. Form 1094-C has been moved to May 31, 2016 if not filing electronically. Form 1094-C can go as late as June 30, 2016 if it is filed electronically. Employer and insurance coverage providers are strongly encouraged to maintain continuous communications with their payroll and benefits providers as this new filing and compliance process unfolds.

When the Affordable Care Act was signed into law on March 23, 2010, there were numerous ramifications for individuals and businesses alike – not just in regards to healthcare and insurance, but in how businesses operate as well. New reporting requirements as a result of that legislation are in effect for 2015 and businesses need to be aware and address these new requirements now in order to ensure timely filing in 2016. The level of information required to be reported is quite detailed and, for example, will require an employer to track the number of hours for every employee, by month, in order to comply – not just with the information reporting, but with the intent behind the law as well.

For Applicable Large Employer’s (“ALEs”) (business entities with an average of 50 or more full-time employees or full-time equivalent employees¹ per year) information is required to be reported to the IRS and each employee on Form 1095-C. This IRS form details such information as whether or not insurance was offered, the amount of the employee share of the lowest cost monthly premium, information in regards to dependents covered and the number of months of coverage. Additionally, an “Authoritative Transmittal” Form 1094-C is required to be filed for each employer which summarizes the data contained on each individual Form 1095-C which will be transmitted or sent to the IRS.

The requirement under the ACA will be met if the employer furnishes each employee Form 1095-C, properly addressed, and mailed on or before January 31 and one “Authoritative Transmittal” Form 1094-C for each employer along with a copy of each Form 1095-C issued to the IRS on or before February 28 if filing on paper (or March 31 if filing electronically²). However, for 2016 the due date for mailing Form 1095-C to each employee is Monday, February 1, 2016 and paper forms of Form 1094-C and Forms 1095-C to the IRS is Monday, February 29, 2016. We strongly recommend that you reach out to your payroll service provider for assistance in ensuring that these new reporting requirements are addressed if you have not already done so because of the level of detail and the transmittal testing required.

For further information and assistance with such issues, please contact your Calvetti Ferguson tax partner at 713-957-2300.

¹ A full-time equivalent employee is a combination of part-time employees.
² If an employer has 250 or more returns, the returns must be filed electronically utilizing the Affordable Care Act Information Return System (“AIR”).

Disclaimer:

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY CALVETTI FERGUSON TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER TAXPAYER ANY MATTERS ADDRESSED HEREIN.

Any advice in this communication is limited to the conclusion (if any) set forth herein and is based on the completeness and accuracy of the stated facts, assumptions, and/or representations included. In rendering our advice, we may consider tax authorities that are subject to change, retroactively and/or prospectively, and any such changes could affect the validity of our advice. We will not update our advice for changes or modifications to the law and regulations, or to the judicial and administrative interpretations thereof.

The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please delete the material from any computer.