For the 2015 calendar year, the Patient Protection and Affordable Care Act of 2010 (“ACA”) imposes information-reporting requirements on health insurance issuers and employers. Insurers and employers are required to report to the IRS and covered individuals information concerning the type and period during which medical coverage was provided. The IRS will use the information to determine whether an employer owes a “shared responsibility” payment (commonly referred to as the “employer mandate”), and whether an employee is eligible for a premium tax credit through the marketplace.
On February 4, 2015, the IRS released finalized forms and instructions that will be used to satisfy these reporting requirements. For the most part, the finalized forms and instructions mirror the draft forms and instructions issued in 2014. The new information-reporting systems require employers subject to the ACA’s “employer mandate” (i.e., those with at least 50 full-time equivalent employees) to prepare a Form 1095-C that will be distributed to employees. These Forms 1095-C will also be filed with the IRS using the Form 1095-B transmittal form. Self-insured employers will be required to complete Part III of the Form 1095-C, while employers with insured programs will not. Electronic filing is required if the employer will file 250 or more Forms 1095-C.
A copy of the Form 1095-C (or a substitute statement) must be given to the employee by January 31 of the year following the calendar year to which the return relates. Employers then must file these returns with the IRS annually by February 28 (March 31 if filed electronically) of the same year.
Employers that were waiting for the final forms and instructions before planning for compliance should now take action. Employers should review the finalized forms and instructions and ensure proper systems and procedures are in place to collect the required data and satisfy the requirements.