This upcoming January 2016, the Affordable Care Act (ACA) Employer Shared Responsibility Rule requires employers to file annual information returns. These new forms (1095B and 1095C) will be required in addition to the already required income reports. The ACA forms will report coverage information to the IRS for enrolled employees and former employees. This submitted data contains details of employees’ health insurance coverage, and will be used to verify that the minimum essential coverage (MEC) requirement has been met. Employees and their dependents will use this information to complete their
personal tax returns – and those who do not have minimum essential coverage may receive a penalty on their tax returns.
Who Must Report and Send Copies to Employees?
- Health insurance companies
- Applicable large employers (ALEs) with 50 or more employees
- Small self-insured employers with fewer than 50 employees
(very small number of businesses)
- Those companies with 250 or more Form 1095-C filings must file electronically
If an employer fails to file and send employee copies, they may face penalties of $250
per filing, up to $3 million.
An Applicable Large Employer (ALE) can be penalized if they do not offer minimum
essential coverage to full-time employees or the coverage is too expensive and the
employee purchases coverage on the Exchange Marketplace. ALE is defined as a
business with 50 or more full-time employees.
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- 1095-B (Health Coverage Form)
- 1095-C (Employer-Provided Health Insurance Offer and Coverage Form)
For more information regarding the ACA Tax Provisions visit www.irs.gov/Affordable-Care-Act