“The IRS will use these forms to enforce the employer penalties, individual mandate and tax credit eligibility rules under the Affordable Care Act,”
Don't ya love do-overs?
Well, if you're nervous about doing the new ACA reporting right, at least you get to do a test run, and do it over if you make some mistakes.
The IRS has recently opened up its Affordable Care Act Assurance Testing system which allows employers to see
if their reporting software is correctly filling out the 2014 Forms 1094 and 1095. In November, the testing system will be cued up with the 2015 reporting forms.
The IRS submission requirements for using the ACA Assurance Testing system advise to:
“read the instructions carefully prior to preparing the submission.”
“Code definitions for Offer of Coverage Codes and Safe Harbor Codes are defined in the instructions and are not
provided in the narrative but must be included within your submission where appropriate,” the IRS cautions.
Good Faith Effort
In addition to a test run, for 2015, employers who file will have protection even if your filing is incorrect or incomplete, as long as you show you made good faith efforts to comply with the ACA reporting requirements. Michael Weiskirch, a principal at EmployeeTech Inc. says a “good-faith effort” is defined as an employer simply attempting to complete the forms.
But the good-faith effort for 2015 tax year will disappear in 2016 and penalties will apply for incorrect information after that.
Test runs begin in November, but hopefully, you've been already collecting the necessary information. Having the ability to track and manage the required data should be happening now, according to Weiskirch. He says the requirements “have put benefit advisers and their clients
at a crossroads and have created a small panic in selecting the ‘just right’ solution.”
Over the last two years, a flood of ACA reporting solutions have entered the market, some stand-alone some
that are to be integrated with your existing HR, payroll or benefit systems.
Whatever method you choose, here's what is required by the IRS:
“With mandatory reporting for ALEs beginning in 2016, understanding the reporting requirements is critical. Accordingly, employers should give careful attention to this and all future IRS guidance as the reporting deadline rapidly approaches,” the group adds.
"In addition to a test run, the IRS issued a Q&A notice to clarify for employers what's coming..."
In addition to the test run, the IRS issued a Q&A notice to clarify for employers what's coming:
"Is an ALE member that sponsors a self-insured health plan required to file Form 1094-C and Form 1095-C if the ALE member has no full-time employees?"
"Generally, yes. An ALE member that sponsors a self-insured health plan in which any employee or employee’s spouse or dependent has enrolled is required to file Form 1094-C and Form 1095-C, whether or not that employer has any full-time employees and whether or not that individual is a current employee or a full-time employee. For an individual who enrolled in coverage who was not an employee in any month of the year, the employer may file Forms 1094-B and 1095-B for that individual."
"Is an employer that is not an ALE member required to file under the Affordable Care Act if the employer sponsors a self-insured health plan that provides minimum essential coverage?"
"No; however, such an employer is subject to the reporting obligations under the Affordable Care Act. An employer that is not an ALE member that sponsors a self-insured health plan in which any individual has enrolled is not subject to the reporting requirements of ACA. Such an employer will generally satisfy its reporting obligations by filing Form 1094-B and Form 1095-B."
"Is an ALE member required to report under the Affordable Care Act with respect to a full-time employee who is not offered coverage during the year?"
"Yes. An ALE member is required to report information about the health coverage, if any, offered to each of its full-time employees, including whether an offer of health coverage was – or was not – made. This requirement applies to all ALE members, regardless of whether they offered health coverage to all, none, or some of their full-time employees. For each of its full-time employees, the ALE member is required to file Form 1095-C with the IRS and furnish a copy of Form 1095-C to the employee, regardless of whether or not health coverage was or was not offered to the employee. Therefore, even if an ALE member does not offer coverage to any of its full-time employees, it must file returns with the IRS and furnish statements to each of its full-time employees to report information specifying that coverage was not offered.
For the full IRS list of questions and answers about reporting requirements for employers, see their Reporting Offers of Health Insurance Coverage by Employers page on IRS.gov/aca.
Sources: Melissa A Winn, IRS allows employers to test run ACA reporting | Benefit News http://ebn.benefitnews.com/news/health-care-reform/irs-allows-employers-to-test-run-ACA-reporting, 9/9/15, 11:32 AM
Questions and Answers to Help Your Organization Understand ACA Reporting Requirements
IRS Health Care Tax Tip 2015-56, September 16, 2015
IRS Clarifies ACA Reporting Requirements for Large
Employers, 6-9-15, http://www.benefitnews.com/news/health-care-reform/irs-clarifies-aca-reporting-requirements-for-large-employers-2746619-1.html
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