Under the Employer Shared Responsibility provisions of the Affordable Care Act (ACA) the IRS has issued reporting requirements for all Applicable Large Employers (ALE) to report full time employees and health insurance offered to these employees and their dependents.
The first couple of things you need to know are:
- Are you an Applicable Large Employer?
- Do you have a fully insured group plan or a self-insured plan?
If you are an ALE and you have a fully insured group plan your insurance company will need to file forms 1094-B & 1095-B. In addition your company will need to file the 1094-C & 1095-C forms.
If you are NOT an ALE and HAVE a self-insured plan you will need to file the 1094-B & 1095-B because you are considered to be the insurance provider.
Somerset can assist with these filing requirements as well as best practices for information gathering required in order to accomplish same. Also, the major outsourced payroll services can likely prepare these forms along with your other payroll filings. As an employer you need to ensure you obtain the following information from your employees to prepare these forms:
- The name, address, and employer identification number (EIN) of the provider;
- The Employee’s name, address, and TIN, or date of birth if a TIN is not available. If the employee is not enrolled in the coverage, providers may, but are not required to, report the TIN of the employee
- The name and TIN, or date of birth if a TIN is not available, of each individual covered under the policy or program and the months for which the individual was enrolled in coverage and entitled to receive benefits; and
- For coverage provided by a health insurance issuer through a group health plan, the name, address, and EIN of the employer sponsoring the plan and whether the coverage is a qualified health plan enrolled in through the SHOP and (except for 2014 coverage reported in 2015) the SHOP’s identifier.
Click here for the IRS FAQ’s for this issue for further clarification.
These forms are first required for the 2015 year to be filed in 2016 but the IRS is requesting that employers participate in a “dry-run” filing for the 2014 year to be filed in 2015. Since the 2014 year to be filed in 2015 is not required we do not recommend you participate (unless you have a compelling business purpose to do so). Somerset has the philosophy to never provide more information to a regulatory agency than required by law. Essentially, it has been our experience that government compliance is the one area in life where is does not generally work in your favor to be an overachiever.
This “Dry Run” is likely more for the IRS to figure out the issues/problems with the filing and could be completely revised for the 2015 filing requirement due in 2016. As a company you probably do not want to dedicate resources to this process until necessary. In addition, having the required information available takes some pre-planning and so it would likely be quite burdensome to go back into the 2014 history and derive the necessary data.
Lastly the forms are not yet final and no one has ever filed these before so there are lots of unanswered questions. We will be monitoring this and will have be issuing updates, recommendations and processes for you to follow for best practices.
Please contact us with any questions.