Posted on May 29, 2015

What Are the Reporting Requirements for the Affordable Care Act?

The Affordable Care Act (commonly referred to as the ACA or Obamacare) was created to increase the quality and affordability of health insurance for Americans, lower the uninsured rate by expanding public and private insurance coverage, and reduce the costs of healthcare for individuals and the government. An outcome of this new legislation is that its employer mandate requires large employers to provide affordable, minimum health coverage to full-time equivalent employees or pay a fine. As well, the law’s individual mandate requires individuals to report about their health care coverage.

But let’s get back to employers…

Because their ACA IRS reporting requirements are significant. Beginning January 1, 2015, large employers—those with 100 or more full-time equivalent employees (FTEs)—are responsible for providing affordable health care coverage to full-time employees, and reporting to the IRS about the coverage they offer. They can be penalized should they fail in either regard. Employers with 50-99 FTEs do not have to provide health care coverage until January 1, 2016—however, they are subject to the same reporting requirements in 2015 as larger employers.

What Forms Are Needed for ACA IRS Filing?

1094-B and 1095-B

Forms 1094-B and 1095-B are filed with the IRS by insurance providers. These forms help verify that individuals have the minimum essential coverage that complies with the individual mandate requirement of the ACA.

1094-C and 1095-C

These forms are filed by applicable large employers to verify their compliance with the employer mandate and to help verify their employees’ compliance with the individual mandate.

So, What Does the Affordable Care Act Mean for You?

By answering a few questions, employers can figure out their filing and reporting responsibilities regarding the ACA.

# Are you considered a large employer in the eyes of the law?
# Are your health benefit plans considered affordable for your employees?
# Which of your employees are considered full time and eligible for coverage?

Different Employers Have Different Obligations under the ACA

If you have 50 or more full-time equivalent employees and you’re fully insured:

* Insurance carrier files Form 1094-B and Form 1095-B->IRS
* Employer files Form 1094-C and Form 1095-C->IRS*
* Insurance carrier furnishes Form 1095-B->Employees
* Employer furnishes Form 1095-C->Employees*

*Handled with care by Paycor

If you have 50 or more full-time equivalent employees and you’re self-insured:

* Employer files Form 1094-C and Form 1095-C->IRS*
* Employer furnishes Form 1095-C->Employees*

*Handled with care by Paycor

If you have fewer than 50 full-time equivalent employees and are fully insured, your insurance carrier handles the 1094-B and 1095-B forms.

* Insurance carrier files Form 1094-B and Form 1095-B->IRS
* Insurance carrier furnishes Form 1095-B->Employees

Please note that Paycor does not file B forms.

If you have fewer than 50 full-time equivalent employees and are self-insured:

* Employer files Form 1094-B and Form 1095-B->IRS
* Employer furnishes Form 1095-B->Employees

Please note that Paycor does not file B forms.

What Happens If You Don’t File?

No company wants to invite the IRS into their business. Employers that don’t file may face penalties ranging from $30 to $100 per return, up to a maximum of $1.5 million. There is some relief in 2015: no penalties will be imposed as long as the filing entity makes a good faith effort to comply with the Affordable Care Act. However, “good faith effort” only applies to the information on the forms, not the date on which they are filed. In other words: all forms must still be submitted by the filing deadline.

How Will Paycor Help Me Comply with the ACA?

Paycor's ACA reporting software helps clients file the required ACA forms with the IRS by:

* Guiding clients through ACA filing based on their business and benefit rules.
* Housing client and employee-specific benefit data in one place for easy IRS reporting.
* Automatically capturing data from the Paycor products and services utilized by our clients.
* Allowing clients to import or manually enter benefit data from non-Paycor systems that is needed for ACA IRS reporting.
* Providing an ACA IRS review that allows clients to validate their data prior to filing at year end.
* Producing 1095-C and 1094-C forms, mailing 1095-C forms to employers or employees, and filing 1094-C forms on behalf of our clients.

What Can You Do Today to Be Ready for the ACA?

When it comes to preparing for ACA IRS filing, knowing what to do is crucial and it never hurts to plan ahead. With time and practice, there are steps that you can take to ensure that you are best prepared. Paycor advises these steps:

p((. 1. PRINT THE BLANK FORMS (you’ll find links to them at paycor.com/aca or earlier in this article) you need to file with the IRS—just for reference. Learn the information you need to start tracking each month. Paycor files the 1094-C and 1095-C forms for you, but remember that you have to provide us with the information.

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2. KNOW YOUR SOURCES of information—is it in your payroll or benefits administration system? Is it in Excel somewhere or a notebook?

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3. DON’T WAIT until the end of the year to start collecting the information you need to file at year end.

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4. REGISTER FOR one of Paycor’s ACA IRS Reporting webinars for a section-by-section review of each form.

p((. 5. SIGN UP for Paycor’s ACA filing service.

Contact your Paycor representative to sign up. In the meantime, visit www.paycor.com/aca to find links to IRS forms, webinars, and other resources.

The ACA is complicated, but Paycor is here to help you figure it out. Stay tuned for more articles like this as we progress throughout the year.

Important notice: This content is provided for educational purposes only and should not be considered legal advice.