If you’re an employer using an Affordable Care Act compliance solution vendor, you may be staring at a survey requesting information about your workforce and feeling bewildered.
The good news, we guess, is that you’re not alone.
More than half (52%) of midsized businesses and 45% of large employers are unsure if they’re at risk of violating ACA compliance requirements this year and nearly one-in-five employers think they are at risk of not complying with Form 1095-C requirements.
The really frustrating thing is that these are perhaps the most important tax forms the U.S. government has introduced since the W-2 came out seven decades ago. But a lot of even larger employers apparently are clueless about what they mean, because the surveys are filled with technical jargon or request data that employers are having a tough time finding.
Some ACA compliance solutions integrate with employer data management systems to make things easy. Others, however, rely on you to provide the data manually.
The forms, in case you’re still unclear, are designed to track compliance with the Obamacare rule that mid- to large-sized employers offer affordable health insurance to workers or face a fine.
The 1094-C forms will be used by companies to indicate to the IRS where they’ve complied with that rule, and 1095-C forms will indicate whether a worker and his dependents have received job-based health coverage.
Employers should be prepared for some questions from their workers about the new forms.
The IRS requires individual filers only to check a single box on the 1040 or 1040EZ forms to indicate whether they had health coverage as required by Obamacare over the course of the year. If a person fails to have coverage for the year, they then have to file another form to calculate their penalty, which for 2015 was the higher of $325 per person, or 2 percent of taxable household income.
A few additional things to keep in mind:
- For 2015, only employers with 100 or more full-time equivalents were required to offer health coverage or face a fine.
- In 2016, the mandate applies to all firms with 50 or more full-time workers.
- But all firms with 50 or more full-time workers must file the 1094-C forms with the IRS this tax season, even if they weren’t legally responsible for offering health coverage to their workers in 2015.
- When employers file the 1094-Cs with the IRS, they also will have to file the 1095-Cs related to individual workers, indicating whether they received job-based coverage.
- Employers in late December got a two-month extension of their deadlines related to the forms. They now have until March 31 to distribute the 1095-C forms to workers, and until May 31 to mail in their 1094-C forms to the IRS, or until June 30 if they file them electronically.
Apprentice Personnel is one of the largest independent staffing firms in Colorado and Kansas.
About the Author
Larry spent 16 years with Century Casino’s and was instrumental in the start-up and growth of the company through expansions in Canada, South Africa, the Czech Republic, Poland and on several cruise ships as well as in Colorado. He was most recently the SVP, Principal Finance Officer and COO of North American operations for Century Casinos Inc., a multinational, Nasdaq-traded gaming company. Earlier in his career, Larry worked at the Johns Manville Corp. Larry spent 13 years in various accounting and finance functions in the company’s fiberglass manufacturing division and was key in the start-up of a molding plant in Indiana. Larry and his wife Kathy and three children live in Colorado. He enjoys four-wheeling, motorcycling, golfing, skiing and brewing beer.