The Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA), is a United States federal statute signed into law on March 23, 2010. The ACA was enacted to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage, and reduce the costs of healthcare for individuals and the government. It introduced mechanisms like mandates, subsidies, and insurance exchanges.
The law requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or sex.
To enforce the ACA, the Internal Revenue System (IRS) provided Section 6056 which requires employers with 50 or more full-time and equivalent employees, to describe the health coverage they offer by filing Form 1094–C (a transmittal) and Form 1095–C (an employee statement). Electronic filing is required for filing more than 250 returns under Section 6056 (Forms 1094–C and 1095–C) during the calendar year. The reporting requirements will apply for 2015 calendar year and reports are initially due in 2016.
For the information that needs to be reported, the final regulations of Section 6056 contain the general method as well as alternative reporting methods. The General method applies to all employers whereas the alternative methods apply to some employers only. Those employers who are qualified for alternative reporting method can also opt to use the general reporting method.
Since general reporting method can meet the requirements of every employer that needs to comply with Section 6056 reporting, this topic provides the requirements for this method.
The following are required to be reported in general reporting method:
The name, address, and employer identification number of the employer, and the calendar year for which the information is reported
The name and telephone number of the employer’s contact person
A certification as to whether the full-time employees (and their dependents) can enroll in minimum essential coverage under an eligible employer-sponsored plan, by calendar month
The number of full-time employees for each calendar month during the calendar year, by calendar month
For each full-time employee, the months during the calendar year for which minimum essential coverage under the plan was available
For each full-time employee, the employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value offered to that full-time employee under an eligible employer-sponsored plan, by calendar month
The name, address, and social security number of each full-time employee during the calendar year and the months, if any, during which the employee was covered under an eligible employer-sponsored plan.
The following are other information required using indicator codes:
Information as to whether the coverage offered to full-time employees and their dependents under an employer-sponsored plan provides minimum value and whether the employee had the opportunity to enroll his or her spouse in the coverage
The total number of employees, by calendar month
Whether an employee’s effective date of coverage was affected by a permissible waiting period, by calendar month
Whether the employer had no employees or otherwise credited any hours of service during any particular month, by calendar month
Whether the employer is a person that is a member of an aggregated group, and, if applicable, the name and Employer Identification Number (EIN) of each employer member of the aggregated group constituting the applicable large employer on any day of the calendar year for which the information is reported
If an appropriately designated person is reporting on behalf of an employer that is a governmental unit or any agency or instrumentality thereof for purposes of Section 6056, the name, address, and identification number of the appropriately designated person
If an employer is a contributing employer to a multiemployer plan, whether, with respect to a full-time employee, the employer is not subject to an assessable payment due to the employer’s contributions to the multiemployer plan
If a third party is reporting for an employer with respect to the employer’s full-time employees, the name, address, and identification number of the third party (in addition to the name, address, and EIN of the employer already required)
The following may need to be reported with respect to each full-time employee for each calendar month:
Minimum essential coverage meeting minimum value was offered to:
The employee only
The employee and the employee’s dependents only
The employee and the employee’s spouse only
The employee, the employee’s spouse and dependents
Coverage was not offered to the employee and:
Any failure to offer coverage will not result in a payment, for example because the employee was in a limited non-assessment period for certain employees
The employee was not a full-time employee
The employee was not employed by the employer during that month
No other code or exception applies
Coverage was offered to the employee for the month although the employee was not a full-time employee for that month
The employee was covered under the plan
The employer met one of the affordability safe harbors with respect to the employee
You must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000. (Medicare)
You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.
Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover (Section 6055). Costpoint does NOT support the printing of 1094-B and 1095-B but you could use data gathered to manually complete the report.
You must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000. (Medicare)
You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.
Effective for calendar year 2015, you must file an annual return in 2016 reporting whether and what health insurance you offered your employees. (1095-C)
Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return in 2016 reporting certain information for each employee you cover.
IRS Forms 1094-C and 1095-C are filed by employers that are required to offer health insurance coverage to their employees under the ACA. The main difference between them is that the 1095-C provides information about health insurance and is sent to both employees and the IRS, while the 1094-C acts as a cover sheet about the 1095-C and is sent only to the IRS.
Employers must send copies of 1095-C forms to their workers and they also have to send them to the IRS. When you send the 1095-C forms to the IRS, you must also file Form 1094-C. The Form 1094-C provides information about:
The employer including address, phone number, employer identification number
The number of employees working for employer
The name of a contact person
The number of full-time employees for each calendar month during the calendar year, by calendar month
The months, if any, during which the employee was covered under an eligible employer-sponsored plan.
The number of 1095-C forms that are being sent
The ACA requires employers with at least 50 full-time workers to offer health insurance to their employees. Each year, those employers must send a statement (Form 1095-C) to all employees eligible for coverage.
Form 1095-C provides following information:
The coverage offered to the employee
The lowest-cost premium available to the employee
The months of the year when the coverage was available
All employees eligible for coverage should get a copy of Form 1095-C, regardless of whether they actually participate in the employer’s health plan. The forms are mandatory with the 2015 tax year.
SETTING UP AFFORDABLE CARE ACT DATA
GENERATING AFFORDABLE CARE ACT REPORTS