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Health Care Reform – Notable News

What Employers Need to Know about ACA Tax Reporting

As mentioned in the last edition of this newsletter, beginning with calendar year 2015, employers with 50 or more full-time equivalent employees (FTEs), classified as Applicable Large Employers (ALE) will be required to file Forms 1094-C (basic information about the employer, any related entities and employee counts) and 1095-C (information about employees/individuals). These forms must be furnished to employees and to the IRS.

Hopefully, employers will have been busy preparing for this required reporting on an ongoing basis to alleviate the amount of work required at year-end and establish the process moving forward. The 1095-C is required for all full-time employees and any part-time employees under the health plan.

Only employers with self-insured coverage will be required to file Section III of the 1095-C that contains information on all dependents covered on the plan, their social security numbers and months of coverage.  Self-insured plans will also be required to provide information on other non-employees such as retirees and those on COBRA coverage.

A word about deadlines and penalties

Reporting to employees must be completed by January 31. This year, the 31st falls on a Sunday, giving employers an extra day with a furnishing deadline of Monday, February 1. Paper IRS filings are due by February 28 (also a Sunday in 2016, making the deadline Monday, February 29). Electronic filing is due to the IRS on March 31.

Employers will be assessed penalties for not filing a return with the IRS and for not providing accurate statements to employees. The penalties are generally $250 per return not filed and $250 for each statement not furnished to an employee. Maximum fines of $6,000 can be assessed for noncompliance. However, for reporting year 2015, relief is offered to employers that make a good-faith effort to comply.

Supreme Court Agrees to Hear Yet Another ACA Challenge – Birth Control Mandate

Last month the United States Supreme Court agreed to consider a fourth ACA provision challenge which follows the ruling in last year’s controversial Hobby Lobby case.  The ACA exemption for houses of worship to provide contraceptives citing religious objections to birth control was also extended to “closely held” private companies with the Court’s June 2014 Burwell vs. Hobby Lobby ruling. The Court has agreed to take on seven cases that seek a full exemption to the contraceptive mandate under the federal Religious Freedom Restoration Act.

The Obama administration’s compromise arrangement after the Hobby Lobby ruling to turn birth control coverage over to the insurer in cases of religious objections is not considered enough of an accommodation by the nonprofit groups named in the seven cases. After last year’s Hobby Lobby ruling, many benefits experts agreed the decision’s narrow scope would have little impact on employers. However, these new cases being considered have the potential to expand the number of employers qualifying for the exemption if the Court rules in their favor.

Oral arguments are expected in March 2016, with a decision expected in June.

 

Bibliography

Atkinson Frysinger, Tina. "What You Need to Know About Affordable Care Act (ACA) Tax Reporting." Our Thoughts On. September 4, 2015.

McDermott, Will & Emery. "Affordable Care Act Penalties Significantly Increased." July 23, 2015.

Winn, Melissa A. "Supreme Court Agrees to Hear Another Challenge to ACA's Birth Control Mandate." Employee Benefit Adviser. November 6, 2015.

 

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BHCG Monitor: Focus on Health Care Benefits - April 2012