Banking & Finance, Government, and Health Care

New Affordable Care Act reporting requirements

January 29, 2016
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If you provide or offer health insurance benefits to your employees, you could be subject to new reporting requirements.

Perhaps one of the biggest filing changes this year is the market reforms provisions to the Patient Protection and Affordable Care Act. Under the new revisions, employers are now required to report health care coverage they provided, offered or did not offer during the 2015 calendar year to both the IRS and their employees. These rules apply to the following groups: Applicable Large Employers (ALEs) and small employers that provide self-insured health coverage.

Applicable Large Employers

ALEs are classified as having 50 or more full-time employees, including equivalent employees. In this instance, employers are required to provide information regarding health benefits offered or not offered as well as enrollment in self-insured health coverage for all employees. This information is a requirement of the employer shared responsibility provision under the ACA. The IRS will use this information for a few reasons. First, to ensure the employers are abiding by this provision. Additionally, to identify individuals ineligible for premium tax credits due to the fact that they are already offered affordable employer-sponsored coverage. In this case, individuals who fall under employer-sponsored coverage are not subject to individual shared responsibility penalties.

Small employers that provide self-insured coverage

Regardless of company size, reporting requirements apply to any employer that offers self-insured health care coverage. The difference in size and coverage offered dictates which information needs to be provided and which type of return each individual will need to file. The IRS has the authority to enforce an individual mandate that requires most taxpayers to have at least “minimal essential coverage” or pay a penalty.

The forms

1095-B, Health Coverage: Commonly for small employers that provide self-insured health coverage, this form is used by the IRS to ensure that an individual has minimum qualifying health insurance coverage. Reporting requirements include: coverage type, dependents covered under policy, and period of coverage.

1095-C, Employer Provided Health Insurance: Commonly for ALEs, this form serves as a statement employers must provide to their eligible employees offering some form of health insurance coverage. Reporting requirements include: number of full time employees each month, eligible coverage months, and cost of cheapest monthly premium.

Difference between the two: 1095-B provides details specific to health care coverage information whereas the 1095-C describes what coverage is made available, if at all.


If an extension is needed, employers can be granted up to 30 days by filing form 8809 (Application for Extension of Time to File Information Returns) or by sending a letter to the IRS Information Returns Branch, Attention: Extension of Time Coordinator, on or before the due date.


Penalties may apply if the forms are submitted late, incomplete, incorrect or if the employer fails to make a good faith effort to comply. Penalties may also apply if an individual fails to furnish a complete and correct copy of Form 1095-B/1095-C. Depending on when or if failures are corrected, penalties range from $50 to $250 per each incorrect or unfiled return. The maximum annual penalty is $3 million for most taxpayers! However, these can be waived if the failures are due to reasonable cause.

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