New Filing Requirements for Affordable Care Act
The Affordable Care Act (ACA) guarantees all Americans access to health care coverage, regardless of preexisting health conditions that may have made coverage inaccessible in the past. It also penalizes many people who are not insured and certain employers who fail to offer coverage to qualifying employees. The penalty for lack of coverage maxed out at $285 for a family in 2014; in 2015, the penalty jumps to $975 for a family; and beginning in 2016, the penalty will increase to up to $2,085 for a family. For businesses, penalties can add up quickly.
To ensure the provisions of the Affordable Care Act are being met, the IRS has implemented new filing requirements for 2015:
- Form 1095-A, Health Insurance Marketplace Statement
- Form 1095-B, Health Coverage
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
There hasn’t been a new IRS form since the W-2 in 1943, so these forms have sparked confusion and questions. To facilitate reporting, the IRS has extended the filing deadlines for businesses (see below for new deadlines).
Does my company have to file a Form 1094 / 1095?
Under the provisions of the Affordable Care Act, certain employers are required to offer health care coverage to their full-time employees.
Beginning in 2015, large employers (with 50 or more full-time or full-time equivalent employees) have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees. Additional information.
Small employers, generally those with fewer than 50 full-time or full-time equivalent employees, may be required to report the value of the health insurance coverage provided to each employee on his or her Form W-2. Beginning for calendar year 2015, small businesses providing self-insured health coverage to employees must file an annual return reporting certain information for each employee. Additional information.
What is it?
Form 1095-B. Health insurance providers and other coverage providers must send this form to the individuals they cover and to the IRS, along with information about who was covered and dates of coverage. Insurers and other coverage providers must provide this form to individuals by March 31, 2016. Remit to the IRS with Form 1094-B, which acts as a cover sheet for the 1095-B. This form is not for Marketplace enrollees.
Form 1095-C. For 2015, all Applicable Large Employer (ALE) Members that offer “self-insured coverage” are required to send this form to certain employees and to the IRS. It contains information about the coverage offered to the employee. Employers must provide these forms to employees by March 31, 2016. This form is not for Marketplace enrollees. Remit to the IRS with Form 1094-C, which acts as a cover sheet for the 1095-C.
Individuals receiving health care through the Marketplace will be sent Form 1095-A by the Marketplace. The deadline for the Marketplace to provide the form is February 1, 2016. This form is for Marketplace enrollees only.
Forms 1095-B, 1094-B, 1095-C and 1094-C must be filed with the IRS by May 31, 2016. For electronic filers, the due date is June 30, 2016. Additional information.
What is the risk of not filing these forms?
Forms 1094-C and 1095-C verify that employers offered health care coverage to qualifying employees. Additional information.
There are penalties for noncompliance, and they can accumulate quickly. Businesses that do not offer health care coverage to full-time employees may incur a shared responsibility payment.
Gathering relevant data from multiple systems to complete these forms can be challenging. Employers needed to record data in 2015 and submit the information in 2016.
Streamline reporting and ensure IRS compliance with Avalara 1099.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
Stay up to date
Sign up for our free newsletter and stay up to date with the latest tax news.