The latest reporting requirements related to the Affordable Care Act (ACA) seem to be a dizzying jumble of numbers and letters. Here’s the who, what, when, why and how of it:
Two new ACA reporting requirements are in effect for plan sponsors, employers and health insurance companies. These reporting requirements determine:
- If an employer must pay a penalty for not offering affordable, minimum value health coverage to its full-time employees (employer “play or pay” mandate via Forms 1094-C and 1095-C)
- If an individual must pay a penalty for not having minimum essential health coverage (Forms 1094-B and 1095-B or Forms 1094-C and 1095-C)
- If individuals qualify for tax credits (subsidies) to buy health coverage in the public exchanges/marketplaces (Forms 1094-B and 1095-B or Forms 1094-C and 1095-C).
Who Files Which Forms?
To figure out which forms a plan sponsor must complete, four questions must be answered:
- Does the employer offer “minimum essential coverage” (MEC)?
Hint: Most types of health plans qualify as minimum essential coverage, including retiree plans and COBRA coverage. However, coverage for “excepted benefits” does not qualify. Examples of “excepted benefits” include coverage limited to dental and vision care, health flexible spending accounts, workers’ compensation and coverage only for a specific disease or condition.
- Is the employer an “applicable large employer” (ALE)?
Hint: An ALE is an employer or a controlled group of employers that employed at least 50 full-time-equivalent employees during the previous calendar year.
- Is the health plan fully insured or self-funded?
Hint: A fully insured plan pays premiums to buy health coverage from a health insurance company, whereas a self-funded plan pays claims directly to health care providers from a trust or the general assets of the employer.
- Is it a single employer plan or a multiemployer plan?
Hint: Multiemployer plans, also known as Taft-Hartley plans, are collectively bargained benefit plans maintained by more than one employer, usually within the same or related industries. They are governed by a board of trustees with labor and management equally represented.
Armed with answers to the questions above, use the charts below to determine who completes which forms.
Single Employer Plans
*For more details see Information Overload: ACA Reporting Compliance for Multiemployer Plans
How to Complete the Forms?
To address how to complete the forms, the IRS provides instructions for each form. IRS forms are seldom very friendly, so you may wish to get some help from your service providers.
Instructions for Forms 1094-B and 1095-B
Instructions for Forms 1094-C and 1095-C
Form 1094-B Transmittal of Health Coverage Information Returns
Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
Form 1095-B Health Coverage 2015
Form 1095-C Employer-Provided Health Insurance Offer and Coverage
When to Complete the Forms?
The first required forms will reflect coverage offered in 2015 and must be filed with the IRS by the end of February 2016, if filing on paper, or the end of March 2016, if filing electronically and distributed to employees by the end of January 2016. Employers may, however, voluntarily report 2014 coverage using the forms currently available from the IRS.
What other resources are available?
Are you a little less dizzy? I hope reviewing the basic questions has provided some clarity to a complicated set of requirements. To learn more, visit our ACA Central web page on reporting and disclosure. If you’re a Foundation member, listen to an informative webcast, “Required ACA Reporting: Minimum Essential Coverage (MEC) and Applicable Large Employer (ALE),” presented by attorney John Barlament in our ACA University.