ACA Reporting Requirements – A Basic Overview

The Affordable Care Act (ACA) requires health insurance issuers and applicable large employers (ALEs) to file annual returns with the IRS reporting on the health plan coverage they offered or provided. The reporting will provide the IRS with the necessary information to administer the ACA’s employer and individual mandates. The first returns are due Feb. 29, 2016 (or March 31, if filed electronically), which report on coverage offered in 2015.

The purpose of this article is to provide a high-level overview of the requirements to ensure affected employers understand their reporting obligations.

What Employers Are Affected?
Only ALEs and employers that sponsor self-insured plans must satisfy ACA reporting requirements. The reporting requirements are found in Internal Revenue Code Section 6055 and Section 6056.

End-of-year Employee Communications

For many HR departments, the end of the year typically involves facilitating open enrollment for group health benefits. As part of (or in addition to) open enrollment communications, consider reminding employees of the following:

• Federal and state tax withholdings. It is not uncommon for an employee to complete his or her Form W-2 upon hire and never think about it again. Remind employees of their ability to update their withholdings. January is a good time for this, as many employees may have started completing their tax returns.

• 401(k) contributions. Many 401(k) plans permit participants to change their contributions only during certain times of the year. Remind employees of their opportunity to update their contributions, and when the next opportunity will be.

• Form 1095-C/1095-B. This is the first year employees will receive a Form 1095-C or 1095-B from their employers or health insurance carriers. Inform employees what the form is and that they will need it to file their income tax returns.

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