Fall 2015 Issue of Horizons

HEALTHCARE

How will the Federal Government know if employers are in compliance with the ACA? In order for the Federal Government to determine if employers are in compliance with the ACA, the applicable information will be reported in a manner similar to the W-2 reporting system in which an employer prepares an information return (Form 1095-B or 1095-C) for each applicable employee and then files a single transmittal form to the IRS (Form 1094-B or 1094-C). The Form 1094 is due annually by February 28 (or March 31 if filed electronically), and the Form 1095 is due annually to each applicable employee by January 31. Employers who do not timely submit Form 1095 to their applicable employees will be subject to penalties of up to $200 for each late return. Who is responsible for filing Forms 1094 and 1095? Form 1095-B and Form 1094-B will be filed by insurance companies, employers who use the SHOP Exchange, small self-funded groups, and individuals who get coverage outside of the Health Insurance Marketplace. Form 1095-C and Form 1094-C will be filed by applicable large employers. It is also important to note that small employers (an employer that has fewer than 50 full-time employees) are also required to file forms 1095-C and 1094-C if they are a part of an aggregate or controlled group or if they are self-funded. What information will employers need to file Form 1095-C? 1. Who is a full-time employee for each month

The penalty for this non-compliance is assessed at the lesser of one-twelfth of $3,000, or $250 per month, for each full-time employee receiving a subsidy or one-twelfth of $2,000, or $166.67 per month, for each full- time employee, less the first 80 employees. The thresholds for penalty assessments in 2016 are different and more stringent than in 2015. In 2016, employers who employed 50 or more full-time employees, or FTEEs, on average during the prior calendar year will be subject to a penalty for any month they fail to provide health care coverage to less than 95% of their full-time employees and their dependents and at least one full-time employee receives a premium tax credit to help them afford health insurance purchased through the Health Insurance Marketplace.

The penalty for this non-compliance will be one-twelfth of $2,000, or $166.67 per month, for each full-time employee, less the first 30 employees. Additionally, another penalty applies if an employer offers employer- sponsored minimum value coverage to full-time employees and their dependents, but the employee contribution is deemed unaffordable and at least one full-time employee received a premium tax credit to help them afford health insurance purchased through the Health Insurance Marketplace. The penalty for this non-compliance is assessed at the lesser of one-twelfth of $3,000, or $250 per month, for each full-time employee receiving a subsidy or one-twelfth of $2,000, or $166.67 per month, for each full- time employee, less the first 30 employees.

2. Identifying information for employer and employee such as name and address

3. Information about health coverage offered by month, if any

4. The employee’s share of the monthly premium for lowest-cost self-only minimum value coverage

page 62 | horizons Fall 2015