November 25, 2015
This letter is to advise you of certain employer reporting requirements and the employer mandate that came into effect in 2015 under the Affordable Care Act.
Employer Reporting Requirements
Beginning in 2015, employers with 50 or more full-time-equivalent employees are required to use Forms 1094-C and 1095-C to report certain information about offers of health coverage and enrollment in health coverage for their employees. More specifically, a separate Form 1095-C is used to report detailed information about each employee. Form 1094-C is used to report summary information and to transmit the Forms 1095-C to the IRS. In addition, these forms are used to determine whether an employer is subject to the employer mandate excise tax (discussed below).
Employers are required to provide the following information on Form 1095-C (Parts I and II) for each full-time employee:
- the employee’s name, social security number, and address,
- the employer’s name, identification number, address, and phone number,
- description of the offer of coverage (using one of the codes provided in the instructions) and the months of coverage,
- each full-time employee’s share of the cost for coverage under the lowest-cost, minimum-value plan offered by the employer, by calendar month, and
- applicable safe harbor (using one of the codes provided in the instructions) under the employer mandate.
Part III of Form 1095-C is not required to be completed unless an employer offers health coverage through an employer-sponsored self-insured plan. If an employer provides health coverage through an insured health plan or multiemployer health plan, the issuer of the insurance or the sponsor of the plan providing the coverage will provide the health coverage information to any enrolled employees.
For calendar year 2015, Forms 1094-C and 1095-C must be filed by February 28, 2016, if filing on paper, or March 31, 2016, if filing electronically. You can obtain an automatic 30-day extension of time to file by filing Form 8809 on or before the original due date. We recommend that you contact your payroll service provider or consider obtaining software to facilitate the preparation and filing of Forms 1094 and 1095.
Beginning in 2015, employers with at least 100 full-time-equivalent employees are generally subject to the employer mandate that was enacted as part of the Affordable Care Act (for years after 2015, the threshold is reduced to at least 50 full-time-equivalent employees). Under the employer mandate, an employer may be subject to an excise tax if any of its full-time employees are certified as having received health care assistance and the employer either: (1) does not offer health care coverage for all of its full-time employees; or (2) offers minimum essential coverage under the employer’s group health care plan that either is not affordable, or does not provide minimum value to its employees.
In addition, an excise tax is imposed on employers for any failure of their group health plans to meet requirements. This excise tax may apply to employer payment plans, in which employers do not establish health insurance plans for their own employees, but reimburse those employees for premiums they pay for their individual policies.
The above is a very simplified explanation of certain employer reporting requirements and the employer mandate under the Affordable Care Act. If you have questions, please contact us at (808) 524-2255.
N&K CPAs, INC.
Wesley B. Hiyane