Did you miss the deadline for Obamacare reporting?
The May 31, 2016 deadline for employers and other providers of minimum essential health coverage to file Forms 1094 and 1095 with the IRS has come and gone, but not all is lost if you plan to file the forms electronically. The deadline has been extended for one month (June 30, 2016), if filing electronically.
As you may be aware, beginning in 2015, the Affordable Care Act, otherwise known as Obamacare, subjects certain employers with 50 or more full-time employees (i.e. “applicable large employers”) to the shared responsibility rules. Under these rules, large employers must offer health insurance benefits to their full-time employees or pay an excise tax. In addition, large employers that offer health insurance benefits which are deemed unaffordable may be subject to the excise tax. The IRS will use the health insurance coverage information reported on Forms 1094 and 1095 to determine if an employer is subject to the excise tax. The IRS will then contact the affected employer at which time they will have an opportunity to respond.
Employers who meet the requirements of an applicable large employer must report certain information relating to the health insurance benefits that they offer (or do not offer) to their full-time employees during the preceding calendar year on Form 1094-C and Form 1095-C. A large employer will use Form 1094-C to report summary information concerning its full-time employees and Form 1095-C to report information specific to each employee. As a result of the new reporting rules, payroll companies are now offering their services to large employers for the filing of these forms.
Employers with fewer than 50 full-time employees are not subject to the shared responsibility rules, but still must report information relating to its health insurance benefits to the IRS using Forms 1094-B and 1095-B. An employer’s health insurance provider is responsible for filing these forms with the IRS. If an employer with fewer than 50 full-time employees provides health insurance benefits to its employees through an employer-sponsored self-insurance plan, meaning the employer pays for its employees’ medical bills, rather than through an insurance company, then the employer is deemed to be the health insurance provider and must file the required forms.
The IRS will assess a penalty of $250 per form for failing to timely file the required 1095 forms with the IRS. In addition, the IRS will assess a penalty of $250 per form for failing to timely furnish a copy of the 1095 forms to each employee for whom the information is reported.
This is a very simplified explanation of the new reporting requirements and excise tax, which are quite complex. If the 2015 forms have not already been filed for your business, we strongly encourage you to contact your health insurance provider, payroll company, or other service provider to confirm this new filing requirement has been addressed. If you would like to discuss how these requirements might impact your business, or, have questions concerning compliance, please call our office at (949) 260-1430 for assistance.
Written by Tim Reyes
SKINNER FOUCH & OLSON LLP