The Affordable Care Act (ACA) requires many employers to report health coverage information to the IRS and to their employees annually. The IRS uses the information to enforce the ACA’s “shared responsibility” provisions (sometimes referred to as the individual and employer mandates) and to administer premium tax credits. The reporting requirements differ based on the size of the employer and the type of coverage the employer sponsors (see Who Must Report below).
The beginning of 2016 was the first time covered employers were required to report (for the 2015 calendar year). In 2017, the deadlines and forms are slightly different. Below is an overview of 2017 reporting requirements.
Who Must Report:
The following employers are subject to the ACA’s reporting requirements:
50 or more employees: Any employer with 50 or more full-time and full-time equivalent (FTE) employees must report, even if they don’t offer a health plan.
Less than 50 employees: Employers with fewer than 50 full-time and FTE employees must report only if they have a self-insured health plan.* If an employer has a fully insured health plan (or no health plan) and has fewer than 50 full-time and FTE employees, they aren’t required to report—the health insurer, if applicable, is responsible for reporting on the employer’s behalf.
* Generally with a self-insured health plan, the employer assumes the risk and pays participants’ claims out of its general assets or a trust.
How to Determine Employee Size:
To determine whether you are required to report in 2017 (for the 2016 calendar year), look at your employee count in 2015. If you are part of a controlled group, you must combine all employees of each company when making this calculation. Controlled groups exist when any two or more entities are treated as a single employer under sections 414 (b), (c), (m), or (o) of the Internal Revenue Code. Where the combined total of full-time and FTE employees in a controlled group is 50 or more, each individual employer is subject to reporting with respect to their own employees (or prior employees).
Select the Affordable Care Act link from the Home menu in RUN Powered by ADP® to find out if you need to report.
New Deadlines for 2017 and Beyond:
The 2017 reporting deadlines are different than in 2016. The 2017 deadlines are:
February 28, 2017 (or March 31, if filed electronically): Forms must be filed with the IRS.
March 2, 2017: Forms due to employees (this deadline was originally January 31, but last month the IRS extended it to March 2).
See What Forms Must Be Used to Report for more information on the forms that must be provided to employees and the IRS.
Slightly Different Forms for 2016:
The forms and instructions are largely the same as they were for the 2015 tax year, but a few differences exist. Be sure to use the 2016 versions of the forms. The forms you use will depend on the size of your business and the type of insurance you offer (links to these forms are provided below).
What Forms Must Be Used to Report:
Small Employers with Self-Insured Plan:
Generally, if you had fewer than 50 full-time and FTE employees in the 2015 calendar year and have a self-insured health plan, you must complete and furnish Forms 1095-B to enrolled individuals and file Forms 1095-B and 1094-B (transmittal) with the IRS. Employers reporting self-insured coverage should complete Part I, Part III, and Part IV of Form 1095-B, but not Part II.
Applicable Large Employers:
Fully insured plans: Generally, if you had 50 or more full-time and FTE employees in the 2015 calendar year and offer fully insured health coverage, you must complete and file Forms 1095-C and 1094-C. Complete Parts I and II of Form 1095-C, furnish a copy to full-time employees, and file Forms 1094-C and 1095-C with the IRS.
Self-insured plans: If you had 50 or more full-time and FTE employees in the 2015 calendar year and have a self-insured plan, complete and furnish Form 1095-C to full-time employees (whether or not enrolled in coverage) and any part-time employees (or certain other non-employees, such as retirees) enrolled in coverage. Additionally, complete and file Forms 1095-C and 1094-C with the IRS. Additional guidance is provided below:
For full-time employees not enrolled in self-insured coverage for any months of the year, only complete Parts I and II of Form 1095-C.
For full-time employees enrolled in self-insured coverage for any months of the year, complete Parts I, II, and III.
For part-time employees and other enrolled non-employees (such as retirees who were not full-time employees for any part of the year), complete Part I, line 14 of Part II, and Part III.
How to Provide Forms to Employees:
In general, 1095-C and 1095-B Forms must be furnished to employees on paper (by mail or hand delivered), unless the employee has given consent to receive the form electronically.
If your company is subject to these reporting requirements, start gathering necessary data in order to meet the applicable deadlines. If you file late, you may be subject to a penalty of up to $260 per form ($520 if both the forms issued to the individual and to the IRS are late).