Show the IRS that you take the new 1094c and 1095c forms seriously by following the lead of other tax-savvy organizations and filing on time with a complete understanding of how these forms work, why they were created and what they replace when it comes to your employees.
According to tax experts at McGladrey:
“The new information reporting system is similar to thecurrent Form W-2 reporting system in that an information return (Form 1095-B or 1095-C) will be prepared for each applicable employee, and these returns will be filed withtheIRS using a single transmittal form (Form 1094-B or 1094-C). Electronic filing is required if the employer files at least 250 returns. Employers must file these returns annually by Feb. 28 (March 31 if filed electronically). Therefore, employers will be filing these forms for the 2015 calendar year by Feb. 28 orMarch 31, 2016. A copy of theForm 1095, or a substitute statement, must be given to theemployee by Jan. 31 and can be provided electronically withtheemployee’s consent. Employers will be subject to penalties of up to $500 per return for failing to timely filethe returns or furnish statements to employees.”
This means that if your company has more than 250 returns to file this year, you need to read up on just how to navigate these new forms and how to file them before the deadline electronically. These forms are required to be in compliance with the Affordable Care Act. Anyone with over 50 employees is likely to have to fill out these forms.
Benefits Glossary: Applicable large employers are those that had, on average, at least 50 full-time employees (including full-time equivalent employees) during the preceding calendar year.
There are some exceptions to the rule.
For example, a large company with a union that does NO reporting on behalf of its employees would not be required to fill out these forms. More precisely, if the union administers benefits for their members and the employer does not take EE deductions, the union is responsible for reporting.
To prepare for the reporting of these forms, employers should take steps now and have a form for any employee to sign to validate the employer offered coverage upon hiring, andthe employee either declined or accepted. Validating records of coverage offers is a good best practice going forward.
The IRS also recommends these monthly tracking initiatives to assist in ACA compliance. To prepare for 2016, applicable large employers need to track information each month in 2015, including:
● Whether you offered full-time employees and their dependents minimum essential coverage that meets the minimum value requirements and is affordable.
● Whether your employees enrolled in the self-insured minimum essential coverage you offered.
You need to track this information because you could be subject to an employer shared responsibility payment if either:
● You offered coverage to fewer than 70% (for 2015; after 2015 this threshold changes to 95%) of your full-time employees and their dependents and at least one full-time employee enrolled in coverage through the Health Insurance Marketplace and receives a premium tax credit, or
● You offered coverage to at least 70% (for 2015) of your full-time employees and their dependents, but at least one full-time employee receives a premium tax credit (because coverage offered was not affordable, did not provide minimum value or the full-time employee was not offered coverage). After 2015, this threshold changes to 95%.
Bio: Tim Olson
Tim Olson, CEBS, CMFC and Managing Partner of the Olson Group, has been working with Nebraska employers for over 33 years and has been in the employee benefits industry since 1980. Presently, Tim works with employers assisting them with self-funded and fully insured medical and dental programs, consumer-driven health strategies, term life, long term disability insurance, section 125 flexible benefit programs, voluntary benefits, retirement programs, and executive compensation plans. Tim currently works with more than 200 employers participating in 500 employee benefit plans, and covering more than 30,000 employees throughout Nebraska, Iowa, Missouri, and Kansas. You can read more about Tim and his insight on employee benefits needs on The Olson Group Blog.