The deadline for getting ACA reporting forms out to employees is March 4, 2019. Here’s a quick overview of the forms and what employees and employers should expect!
Since Affordable Care Act (ACA) coverage reporting only happens once a year, every year it seems like everyone is starting from square one. I get the same questions every year. And I certainly understand. This stuff is a hotbed of confusion. Let’s break it down into understandable segments!
Two Types of Reporting
The government tracks two sets of information, with each being used to support different ACA mandates.
Mandate #1: All individuals in the US needed to be enrolled on qualified medical coverage in 2019 – otherwise the individual will need to pay a personal penalty (unless they fit into a waiver category). This is called 6055 MEC (Minimum Essential Coverage) reporting. This is the mandate that has now been eliminated as of 1/1/2019, but we are still required to provide reporting to the government.
Mandate #2: All large employers in the US need to offer qualified, affordable medical coverage to their full time (30+ hours per week) employees – otherwise the employer will need to pay an employer penalty. This is called 6056 ALE (Applicable Large Employer) reporting.
MANDATE #1 – MEC REPORTING – IRS SECTION 6055
Employee 1095-B Forms
When filing 2018 taxes, each individual must attest that they (and their dependents) were covered under a qualified medical plan, or were exempt due to one of the many waivers available, for all 12 months of 2018. The form 1095-B they receive provides this information. While the tax payer does not need to include this form in their tax filing submission, they need to keep it in their records as proof should they ever be audited.
Providing the 1095-B Forms
All individuals covered under a fully-insured qualified medical plan will receive a form from the insurance company. If the individual was covered for some months under one insurance company, then other months under a different insurance company, they can expect to receive one form from each carrier they were covered with during 2018.
Any employee covered under a self-funded medical plan (including partial self-funded and level-funded plans) will receive a form from their employer who provided the self-funded plan. Under a self-funded medical plan, the employer is considered the “insurance carrier” and therefore must provide the coverage form to their employees.
Reporting to the IRS – 1094-B Form & Copy of 1095-B Forms
The insurance company must provide the reporting data to the IRS. This includes a “rollup” data form (Form 1094-B) as well as copies of the forms that were sent to members/employees (Form 1095-Bs). And remember, a self-funded employer is considered the “insurance company”; therefore, the reporting falls on their shoulders.
MANDATE #2 – ALE REPORTING – IRS SECTION 6056
Employee 1095-C Forms
All Applicable Large Employers (ALEs) must provide data to the IRS regarding whether they offered coverage, and the type of coverage, to their full-time employees. Full-time employees are defined as those working either 30+ hours per week or 130+ hours per month. The IRS will use this information to administer the employer “pay or play” mandate, as well as to determine whether an employee who obtained individual coverage on their state health insurance exchange was eligible for an individual premium tax credit (also called a subsidy).
Providing the 1095-C Forms
All employers with 50+ full-time equivalent employees (FIE) during the prior calendar year must provide these forms to full-time employees. For the 2018 calendar year, the employer looks at their average FIE count over all of 2017. If 50+, then they must complete the 2018 calendar year reporting in early 2019. We have a free FIE calculator available here (registration required).
Reporting to the IRS – 1094-C Form & Copy of 1095-C Forms
ALE employers must provide the reporting data to the IRS. This includes a “rollup” data form (Form 1094-C) as well as copies of the forms that were sent to members/employees (Form 1095-C).
Note that if an employer must file both the “B” MEC series of reports and the “C” ALE series of reports, they will be able to include the “B” data on all “C” forms (therefore, they will only have to mail one form to each employee and will only need to do one filing with the IRS).
TIMING OF REPORTING
For calendar year 2018 reporting, there are a few different due dates:
An employer-friendly synopsis - Pulse Point - ACA Reporting Compliance Grid for Employers - is available for your use in our free Broker Resource Library here. (registration required).
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I love numbers. I'm a math geek. I read benefits industry articles and periodicals for relaxation (but, honestly, I'm still a fun gal). I also like to share what I've learned and you'll find it all here.