Affordable Care Act (ACA) Reporting in 2015: What Businesses Need to Know

By now, most businesses are familiar with the Affordable Care Act (ACA). What remains unclear for many employers are the reporting requirements and which businesses are required to report.

In 2016 (for reporting on calendar year 2015), Applicable Large Employers (ALE) will have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees. With that said, incorrect reporting will not be penalized for calendar year 2015 if employers file in a timely manner and display a good faith effort to comply.

Which employers are subject to information reporting and shared responsibility provisions?

ALEs are subject to the employer shared responsibility provisions.  

ALEs are generally those with 50+ full-time equivalent employees. Whether an employer is an ALE in a particular calendar year depends on the size of the employer’s workforce in the preceding calendar year.  To be an ALE for a particular calendar year, an employer must have had an average of at least 50 full-time employees (including full-time-equivalent employees) during the preceding calendar year.  So, for example, an employer will use information about the size of its workforce during 2016 to determine if it is an ALE for 2017.

Under the Affordable Care Act’s employer shared responsibility provisions, certain employers (ALEs) must either offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employees (and their dependents), or potentially make an employer shared responsibility payment to the IRS.  The employer shared responsibility provisions are sometimes referred to as “the employer mandate” or “the pay or play provisions.”  The vast majority of employers will fall below the ALE threshold number of employees and, therefore, will not be subject to the employer shared responsibility provisions.

What type of information reporting is required?

• ALEs must report to the IRS information about the health care coverage, if any, they offered to full-time employees. The IRS will use this information to administer the employer shared responsibility provisions and the premium tax credit.
• ALEs also must furnish to employees a statement that includes the same information provided to the IRS. Employees may use this information to determine whether, for each month of the calendar year, they may claim the premium tax credit on their individual income tax returns.
• Some ALEs may be eligible to use an alternative reporting method designed to simplify and reduce the cost of reporting. For more information about the alternative reporting methods, see section 301.6056-1(j) of the regulations.

For a complete list of ALE resources you can also visit: https://www.irs.gov/Affordable-Care-Act/Employers/ACA-Information-Center-for-Applicable-Large-Employers-ALEs