Affordable Care Act: Reporting Coverage
Nov 13, 2015
Under the Affordable Care Act, any entity providing minimum essential health coverage to individuals must report such coverage to the IRS and to the covered individual. Information reporting was voluntary for 2014; no one was required to file. However, the first information reporting returns are due to be filed in 2016 covering the 2015 year. Required employers that are “applicable large employers” (ALE) and employers of any size who maintain self-insured health plans will have to report their 2015 coverage to the government.
Generally, an employer will look to its employment numbers for 2014 to determine if it is an ALE for 2015. If the employer had at least 50 full-time employees, including full-time equivalent employees, during 2014, it will be considered an ALE for 2015.
Those required to file information returns will need to report information including:
- The name, address, and employer ID number of the provider
- The responsible individual’s name, address, and taxpayer ID number
- The name and taxpayer ID number of every individual covered under the policy (employee, spouse, and dependents) and the specific months for which each individual was enrolled in coverage
- For coverage under a group health plan, the name, address, and EIN of the employer sponsoring the plan; the SHOP plan’s identifier number, if applicable
- Name and phone number of the provider’s designated contact person
Employers should be taking steps now to prepare for the upcoming filing season. In most cases, the health insurance carriers or issuers will prepare and file the necessary forms. Employers should be having discussions now with their carriers to verify filing responsibility. Those with self-insured plans will need to review their personnel records to ascertain they have all the required information. If an employer utilizes the services of a third-party payroll service, it should make sure all the information is available. Employers will also need to obtain monthly counts of full-time employees and total employees, and how many of these were offered coverage. Special rules apply where an employer offers a group medical plan and a separate Health Reimbursement Account (HRA).
The IRS has issued forms designated as 1094 and 1095 to be used to report the health insurance information. Forms must be filed with the IRS by Feb 29, 2016; employees must be furnished their forms by Feb 1, 2016. Filers with more than 250 forms must file electronically with the IRS. Don’t wait until early next year to start reviewing your records—make sure you can capture the necessary information from your payroll system now to avoid unnecessary problems later!
By: George Monger, CPA
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