Now that the ACA seems securely in place (twice confirmed by the Supreme Court), let's look at the most troublesome provision for employers: The Employer Mandate.
- The Employer mandate was originally set to begin in 2014, but was delayed until 2015/2016.
- All businesses with 50 or more full-time employees (calculated using FT equivalents) are required to provide ACA quality health insurance to 95% of its full-time employees and dependents up to age 26, or pay a Shared Responsibility Fee of up to $2,000 per each FT employee. These businesses are known as Applicable Large Employers (ALE). ACA quality health insurance is known as Minimum Essential Coverage (MEC). ACA quality means the coverage is affordable, provides minimum value, and includes all required provisions under the ACA.
- Firms with 100 or more full-time employees need to commence in 2015
- Firms with 50 to 99 full-time employees need to start insuring full-time workers in 2016, and they will determine if they are an ALE based on 2015 employment
- The Employer Mandate and its reporting requirements do not apply to employers with 49 or fewer full-time employees. Employers with fewer than 25 full-time employees with average annual wages of less than $50,000 may qualify for a premium credit.
Reporting Requirements: Forms 1094-C and 1095-C
- Employers with 50 or more Full Time Employees (including FT Equivalents) must file Forms 1094-C and 1095-C to report information required under the ACA
- The reported information is about offers of health coverage to full-time employees, quality of health coverage offered, and enrollment of employees
- Form 1094-C is both a summary of information for each employer, as well as a transmittal for Form 1095-C. A separate 1095-C is prepared for each FT employee, and the employees are provided with a copy. It is from these forms that the IRS will know if your insurance provides MEC as a basis for charging fees. Also, the employee will use their copy of the 1095-C to assist in determining if they qualify for a Premium Tax Credit as well as tell the IRS if the Individual Mandate should apply.
- Due dates:
- February 1 for prior plan year (2016 for 2015): 1095-C submitted to employees
- February 28/29 for prior plan year (2016 for 2015): 1094-C submitted by mail due to the IRS
- March 31 for prior plan year (2016 for 2015): 1094-C submitted electronically due to the IRS
NOTE: These forms are the end of the process. The beginning of the process is an analysis of your current insurance coverage, and the number of full-time employees and full-time equivalents to determine ALE status, and your administrative procedures regarding the offers to employees and their enrollment into the plan. You should consult with your insurance carrier and payroll service provider as soon as possible. Please contact The Bonadio Group with any questions regarding the above.
John Fontanella is a principal based out of our Syracuse, NY office. Cheryl Prout is a partner based out of our Buffalo, NY office.