Staying up to speed with the evolving news on the Affordable Care Act (ACA) can be overwhelming; meeting employer annual ACA tax reporting requirements can feel like a full-time job. To help you stay up to date and manage ACA compliance for your organization, we’ve put together a few commonly asked questions many large employers and self-insured employers have about annual ACA tax reporting requirements.
Employer Annual ACA Tax Reporting Requirements
What Are The Employer Annual ACA Tax Reporting Requirements?
Per the ACA Employer Shared Responsibility Mandate, applicable large employers (referred to as ALEs), with 50 or more full-time and full-time equivalent (FTE) employees in the previous year are required to file two forms when reporting on ACA compliance:
- Form 1095-C: Employer-Provided Health Insurance Offer and Coverage Form. Furnish this form to employees and submit to IRS to show coverage offering.
- Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. This transmittal form accompanies Form 1095-C information returns. Reports on healthcare coverage offering to all full-time employees and their dependents.
The employer must file both forms for each individual employee who was considered a full-time employee for any month of the previous calendar year.
What Information Do I Need for Employer Annual ACA Tax Reporting Requirements?
For Form 1094-C, employers need to report on the following:
- Employer’s name, employer ID number, contact information
- Total number of filed Forms 1095-C (this will be based on number of full-time equivalent employees during the previous year and any non-full-time equivalent employees who enrolled in the employer’s self-insured health plan)
- Proof by month regarding whether the employer offered the full-time equivalent employees (and their dependents) the opportunity to enroll in minimum essential health coverage
- How many employees and full-time equivalent employees stated for each month
- Names and employer ID numbers of additional employers who are in a controlled group or affiliated service group
For Form 1095-C, employers need to report on the following:
- Proof of minimum essential health coverage
- Employees’ ID and social security numbers
- Social security number of the employees’ dependents (employees must provide this)
What Are the Penalties for Late or Incomplete Employer Annual ACA Tax Reporting?
ACA compliance is not optional. It’s the law.
Not complying with the tax reporting standards can result in penalties and increased risk of audit for the employer. Failure to complete and file the Form 1094-C by the set deadline can result in IRS penalties equal to $260 per form. Failure to file and furnish Form 1095-C can result in an additional $260 per form penalty. Those penalties cannot exceed $3,218,520 for the 2018 year.
Managing employer annual ACA tax reporting compliance is no simple task.
From facing the administrative burden to determine and track reportable employees and work hours based on the IRS definition of FTE to maintaining accurate employee records with their applicable dependents, employers are ultimately responsible for ensuring all information is completed, filed and furnished within the required timeline.
What Are the Next Steps for Employers?
The best way employers can ensure plan compliance and reduce exposure to possibly steep financial penalties is to seek assistance from a qualified provider who can alleviate the burden and risk from noncompliance.
A professional service provider, such as NPPG, is well versed with the intricacies of the employer annual ACA tax reporting requirements and is able to help reduce the administrative burden and strain on internal resources felt by the employer by gathering, calculating, verifying employee data to prepare the government Forms for the employer to be submitted. With this strategic service, employers can spend less time (and stress) managing the burden of paperwork. Instead, they can put their focus on growing the bottom line for their business.
Expert Assistance on ACA Tax Reporting Requirements from NPPG
We’re half way through the calendar year, prepare ahead for 2018 ACA reporting and compliance to avoid getting stuck with big penalties next year. Helping employers comply with ACA tax reporting requirements, avoid penalties and take advantage of affordable health care benefits for employees, Northeast Professional Planning Group, Inc. has the resources necessary to ensure that our clients are prepared, informed and in compliance with any laws or regulations that may affect their employee benefit program.
We are your trusted partner dedicated to helping you improve business performance and financial results.
For further information, contact Northeast Professional Planning Group, Inc. corporate office in Red Bank, NJ at (732) 758-1577.