August 12, 2015
Employer Shared Responsibility Provision - Reporting Requirements
In light of the most recent Unites States Supreme Court ruling (King v. Burwell) upholding premium tax credits to individuals living in states without their own health insurance exchanges, the provisions of the Affordable Care Act remain unchanged. As such, business owners should continue to prepare to meet the requirements of the Employer Shared Responsibility (ESR) provisions.
Highlights to understanding your reporting responsibilities are as follows:
Applicable Large Employers (ALE) – generally businesses employing 50 or more full-time employees including full-time employee equivalents during the preceding year – are subject to end-of-year reporting requirements for 2015.
Certain reporting requirements (Forms 1094-B and 1095-B) also apply to employers that sponsor self-insured coverage, even if employer is not an ALE. Instructions for these forms are located at www.irs.gov/pub/irs-pdf/i109495b.pdf.
The following information should be tracked on a monthly basis during 2015:
- Employee counts and full-time employee status information
- Enrollment information and offers of health insurance coverage
- Information about affordability and adequacy of coverage offered
The following forms are required to be filed by February 29, 2016 (or by March 31, 2016, if filed electronically):
- Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns (www.irs.gov/pub/irs-pdf/f1094c.pdf)
- Form 1095-C Employer-Provided Health Insurance Offer and Coverage (www.irs.gov/pub/irs-pdf/f1095c.pdf)
Forms 1095-C must also be furnished to employees by February 1, 2016.
These forms are used in determining whether an employer owes a payment under the ESR provisions and in determining the eligibility of employees for the premium tax credit.
Enforcement (i.e. penalties) of ESR provisions is delayed until January 1, 2016 for ALE’s with between 50 and 99 full-time employees (including full-time employee equivalents) who qualify for transition relief. To qualify, the following criteria must be met:
- Maintain workforce and hours (i.e. employer did not reduce workforce size or hours in 2014 to avoid ALE thresholds);
- Not eliminate or materially reduce any health coverage offered prior to February 9, 2014; and,
- Provide certification they qualify for this relief in ESR end-of-year reporting (reporting requirements still apply even if qualified for transition relief.)
Penalties may be assessed for 2015 for employers not meeting requirements to provide affordable minimum essential healthcare insurance coverage if at least 1 employee obtains a subsidy for coverage.
No penalties will be charged to ALEs who have fewer than 80 full-time employees in 2015.
If you have any questions about the Employer Shared Responsibility provisions of the Affordable Care Act and how it affects you, please contact us at 312.670.7444.