Tuesday, August 26, 2014

Draft Tax Forms Available for ACA Reporting Requirements

Beginning with the 2015 calendar year, the Patient Protection and Affordable Care Act (ACA) will impose reporting requirements on employers.  One such requirement will apply to all employers, regardless of size, who provide health insurance coverage to their employees.  Another requirement will apply to all large employers (employers who employ 50 or more full-time-equivalent (fte) employees), regardless of whether or not they provide health insurance coverage to employees.  Many employers have had questions about what kind of information they are required to report, who is to report it, and how it is to be reported.  Recently, the Internal Revenue Service (IRS) released some draft forms to give employers at least an idea as to what they (or their insurance carriers or self-insurance plan administrators) will be required to report.  These forms are available on the IRS web site.

The reporting requirements are annual.  Information returns must be filed by February 28 of each year, or March 31 if the forms are filed electronically.  Electronic filing is required if the employer is filing at least 250 information returns.  For the 2015 calendar year, forms containing the required information are to be filed by February 28, 2016 if filed manually or March 31, 2016 if filed electronically.

Employers, regardless of size, who provide group-plan health insurance coverage to their employees by means of commercial insurance policies must submit Form 1095-B for each employee.  That form, which will be prepared and submitted by the insurers, is designed to enable the IRS, for individual mandate compliance purposes, to identify employees who have employer-provided health insurance coverage for themselves and their families.  Form 1094-B is a transmittal form that will be used to transmit the Forms 1095-B to the IRS.  Small employers (less than 50 fte) with self-insured plans (or their plan administrators) also will use Forms 1095-B and 1094-B for their information returns.

All large employers, regardless of whether they provide group-plan health insurance coverage to their employees or not and regardless of whether any coverage they do provide is commercial or self-insured plan coverage, must submit Forms 1095-C and 1094-C.  Form 1095-C will disclose whether, as to each employee, affordable coverage has been provided or an offer of affordable coverage has been made by the employer.  This information will enable the IRS to determine whether the employer is subject to the employer mandate penalty and whether the employee in question is eligible for a premium tax credit on the Marketplace insurance exchange.

Current forms are simply drafts and are not to be filed.  It is expected that the forms will be modified to reflect changes in reporting requirements as the reporting deadlines draw closer.   But employers, insurers, and self-insurance administrators may be interested in reviewing the draft forms to become familiar with the information likely to be required by the IRS in 2016.