ACA Reporting Forms Released

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Last week the IRS published the final versions of the forms and instructions that applicable large employers (ALEs) will need to use to report on employees’ 2015 health coverage. Draft versions of the forms were released in June and the final versions do not include any major changes. With the final versions now available, ALEs can begin working to complete the forms in advance of their February 2016 deadline.

Reporting under ACA Sections 6055 and 6056 was originally scheduled to go into effect for the 2014 plan year, but this was delayed until this year when the employer mandate was postponed for some larger employers. This reporting is a critical piece of the health reform law because it provides the IRS with the information it needs to determine individuals’ eligibility for premium assistance subsidies and employers’ liability for the “play or pay” and “play and pay” penalties. In addition to filing reports with the IRS (Form 1094-C and Form 1095-C), an affected employer is also required to provide a statement to each full-time employee who is provided minimum essential coverage at any point during the year.

With the employer mandate in full effect this year, employers subject to the mandate need to report on the health insurance coverage they offered (or did not offer) to all of their full-time employees for each month of the year. Employers who fail to report on time will face a penalty of $250 per return, up to an annual maximum of $5 million. The penalty for unfiled returns and statements is in addition to any “play or pay” or “play and pay” penalties an employer may owe.

Although the final forms and instructions for ACA reporting were not available until last week, employers were expected to have been tracking employee information to prepare for ACA reporting all year. In reality, many employers have not done so and are unfamiliar with the reporting requirements.

A variety of payroll, benefits administration, and technology vendors offer services and products to assist help prepare the required ACA reports and statements. However, many of these firms are overwhelmed by demand and are no longer accepting new clients for 2015. This means that HR professionals who do not already have a system in place need to make a plan now on how they will complete the IRS forms and provide employee statements.