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Payroll Taxes

Have more than 50 employees? You need to know about ACA (Affordable Care Act) information reporting and IRS 1095 tax forms

November 25th, 2015

ACA (Affordable Care Act) information reporting of IRS1095 forms will be mandatory for companies with more than 50 employees.

Because it is new, there are bound to be questions about the ACA (Affordable-Care-Act) employer reporting requirements and the correct ACA compliance process to report.  The IRS codes section 4980H, 6056, 6055, regulations, requirements and options for ACA information reporting are a mouthful and seem very complicated.  However, it may not need to be difficult for your organization.

First, determine if your organization needs to report ACA (Affordable Care Act) information. If your company has more than 50 full-time employees, your company is an Applicable Large Employer (ALE). You are required to issue IRS 1095-C to employees and file form 1095-Cs and form 1094-C to the IRS. Unless your company has less but close to 50 full-time and some part-time employees, don’t bother with the full-time equivalent calculation, just file the forms.

irs-form-1095

If you’ve determined that you need to file, just follow the process below to get it done.

How to file 1095-C:

  1. On Form 1095-C Line 14 – Gather all employee information including new and terminated employees during the year and their participation by month, all 12 or just some of the months for each employee.  This is to show that if the company offers an affordable medicare plan to the employees.  Choose a proper series 1 code to represent the offered plan.
  2. On Form 1095-C Line 15 – Calculate the employee portion of the health insurance premium.  If the company pays 100% of the health insurance premium, line 15 is $0.00.  Otherwise, calculate and enter the amount that the employee is responsible for in line 15.  The amount is the portion of the premium that the employee needs to pay for the insurance plan for him or herself only.  It does not include premium on any dependents.
  3. On Form 1095-C Line 16 – It is used to explain or defend that the employer has offered an affordable health plan or why an affordable health plan was not offered.  Enter an appropriate series 2 code.  Line 16 can be left blank if there is no applicable code.
  4. On Form 1095-C Part III – If the plan is a self-funding plan (check with your insurance broker), you need to enter the information for all that are insured, including the employee, in part III of the form 1095-C.  You can probably get the information from the insurance company for all that have enrolled in the plan.  If you do not have SSN for any dependent, you can use the date of birth instead.

The IRS 1095 tax forms for health insurance are due to the employees by the end of January (1/31) and due to the IRS by the end of February (2/28).  E-Filing extends the filing deadline to 3/31.

In summary, information required on form 1095-C includes:

  • Basic employee name, address, SSN, etc.
  • Code series 1 – Company insurance offer description (1A, 1B, 1C….).
  • Employee’s share of premium (not including dependents).
  • Code Series 2 – Basically explain or match series 1 code (2A, 2B, 2C….).
  • If self-funding, enter all insured dependent information (Part III).

There are more details about the reporting methods or calculations for IRS forms 1095-C, 1095-B and other ACA reporting forms.  However, for most ALEs, the few simple steps above may be all you need.


 

You can now e-file form 1095-C with 1095manager.com:

Paycheck Manager has partnered with 1095manager.com to offer this reporting service.

www.1095manager.com  is an online tool for creating 1095-C, 1094-C, printing and filing the forms to the IRS.  It’s simple, efficient, and flexible for companies to manage all of their 1095-C information reporting needs.

File Form 1095 Today

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