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The Affordable Care Act: Important Changes To Employer Reporting Of Health Coverage For 2015

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The Affordable Care ActThe Affordable Care Act has created reporting requirements under Internal Revenue Code Sections 6055 and 6056 for health insurance coverage. As of August 2015, new changes to Employer Reporting requirements have been announced. Not only does this affect employers with more than 50 employees, it also impacts those employers with fewer than 50 employees that have a self-funded health insurance plan in place. And now it also impacts all employers that offer an HRA, as part of their benefit program. As of this writing, health FSAs, HSAs, dental and vision insurance are not reportable under these requirements. I have recapped below the highlights of the most recent changes.

Reporting Requirement For Small Employers

As a reminder, forms 1094B & 1095B are used by small employers with fewer than 50 employees that offer a self-funded health plan. And now these reporting requirements are also necessary for small employers that offer an HRA. The forms are required for those employees that are covered by either the self-funded plan or an HRA. Form 1095B needed to be filled out completely when reporting on a self-funded plan and an HRA, including dependent information. If an employer has both a self-funded plan and an HRA, they report on the self-funded plan only. If the employer offers a fully-insured health plan and an HRA, they report only on the HRA.

Reporting Requirement For Large Employers

Forms 1094C & 1095C are used by large employers (with more than 50 employees), no matter what type of health plan they offer (fully insured or self-insured plans) and even if they offer no plan currently. A form is filed for every full-time employee in regards to the offer of coverage and is not just for those employees on the group’s health plan. (For example, if an employee has coverage through their spouse, a form needs to be completed for that employee since he is full-time and was offered health coverage.) Also, be aware that if a large employer offers both a fully-insured health plan and an HRA, they report on the health plan only.

New Reporting Guidelines For Employers With Union Employees

Employers are reporting on data for the 2015 calendar year, due in early 2016, and are responsible for reporting on both the union and non-union employees. However, there has been some relief for 2015 for MULTI-EMPLOYER PLANS. A form still needs to be filed by the employer for the union employees, but the data that is required is simple. Part I still needs to be completed with the employee’s information. But, under Part II of form 1095C, the code 1H is entered (1H means “No offer of coverage”) on line 14. On line 16, the code 2E is entered. (Code 2E indicates that an employer is required to contribute to a multi-employer plan on behalf of the employee.) No other data is necessary on the union employee’s form.

Reporting On Non-Fulltime Employees

Large employers must also report on “other” NON-FULLTIME employees, such as Directors, retirees, terminated employees and those on COBRA. COBRA participants may include former employees, as well as any active employees who have had a reduction in hours. For former employees, reporting is only required if they enroll in the health coverage under COBRA. But the coverage they had as an employee is still reportable.

Requesting An Extension To File Or A Waiver To Not File Electronically

The IRS wants employers to make a good faith effort to report information timely and accurately. However, if an employer needs more time to complete the forms, they can file IRS form 8809 by the original filing due date and that will give them an automatic 30 day extension. Also, if an employer has an issue filing electronically, they can use IRS form 8508 to get an exception to file using paper. They must file this form 45 days prior to the electronic due date.

This is a guest post written by: Nancy Damato

Please note that this information is subject to change.   To view the forms mentioned in this article, please visit www.irs.gov. For more information about these changes and to receive updates as they occur, please feel free to contact us to be placed on our mailing list: ndamato@rdabenefits.com or 855-693-0772. RDA Benefit Services, LLC is an employee benefits firm that offers group health, dental, vision and voluntary benefits, as well as executive and individual life, disability and long term care insurance.

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