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ACA Reporting for 2016

Under the Affordable Care Act, all employers are required to submit reporting forms to both employees and the Internal Revenue Service. These forms will reflect the employer’s compliance with health care reform’s “shared responsibility” mandate to provide affordable health coverage to its employees. The exact forms depend on the number of employees in your company.

Employers with 50 or more full-time equivalent employees, known as applicable large employers in 2016, must complete and file Forms 1095-C and provide each full-time employee with a copy, even if they are no longer employed. The form requires an applicable large employer to track the number of full time employees for each calendar month and list coverage information for each full time employee. Employers are required to provide employees with a copy of the form to show that the employee has insurance and therefore would not be required to pay the individual penalty. (The penalty is whichever is higher of 2.5% of household income; per adult $695, $347.50 per child under 18 with a maximum of $2,085). Further, the employee can use this information to determine if they are eligible for a premium tax credit.

The Affordable Care Act requires that employers with 50 or more full-time employees provide affordable coverage that provides at least a minimum level of benefits to 95% (beginning in 2016) of their full time employees or be subject to penalties based on the number of employees who receive subsidized coverage on a public insurance marketplace. Applicable large employers must provide a Form 1095-C for each full-time employee regardless of whether the employee participates in the employer-sponsored group health insurance plan.

For employers with fewer than 50 full-time employees, Form 1095-B must be completed. The Form 1095-B should be provided to you by the insurance company, if your company sponsors an insured plan. If the employer does not receive this form, you should inquire about it because it is the company’s responsibility to file it.

Both the 1095-C and the 1095-B forms must be filed with the IRS, are based on the 2015 calendar year, and provided to employees. As with Form W-2, copies of the forms must be provided to individuals by January 31, 2016. The forms must be filed with the IRS by February 28, 2016 if reporting on paper or by March 31, 2016 if reporting electronically. As these are IRS forms, employers should be seeking the assistance of their accountants to complete the forms, if necessary.

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