2017 ACA Tax Reporting Reminder - Deadline Extended
Health Care Information Reporting Deadline Extended:

The IRS announced significant updates to the filing guidelines for ACA forms on Friday, which: 
  • Extend the deadline for furnishing employees with 1095-B or 1095-C forms from January 31, 2017 to March 2, 2017
  • Extend the good faith compliance standard used during 2015. Incomplete or inaccurate forms will not be subject to a penalty, so long as they were filed on time and the filer was operating in good faith
  • Did not change the employer filing deadline; the deadline is still February 28 (paper) and March 31 (electronic)
If your organization is an applicable large employer, you must report information about the health care coverage you offered to your full-time employees. As an employer, it's not too early to start thinking about these seven facts related to your information reporting responsibilities under the health care law.
Determining if an Employer is an Applicable Large Employer

Basic Information
  • Two provisions of the Affordable Care Act apply only to applicable large employers (ALE):
  1. The employer shared responsibility provisions; and
  2. The employer information reporting provisions for offers of minimum essential coverage
  • Whether an employer is an ALE is determined each calendar year, and generally depends on the average size of an employer's workforce during the prior year. 
  • If an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is not an ALE for the current calendar year. Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting provisions for the current year. 
  • To determine its workforce size for a year an employer adds its total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year and divides that total number by 12.
Full-time Employees and Full-Time Equivalent Employees

A full-time employee for any calendar month is an employee who has on average at least 30 hours of service per week during the calendar month, or at least 130 hours of service during the calendar month.

A full-time equivalent employee is a combination of employees, each of whom individually is not a full-time employee, but who, in combination, are equivalent to a full-time employee. An employer determines its number of full-time-equivalent employees for a month in the two steps that follow:
  1. Combine the number of hours of service of all non-full-time employees for the month but do not include more than 120 hours of service per employee, and
  2. Divide the total by 120.
An employer's number of full-time equivalent employees (or part-time employees) is only relevant to determining whether an employer is an ALE. An ALE need not offer minimum essential coverage to its part-time employees to avoid an employer shared responsibility payment. A part-time employee's receipt of the premium tax credit for purchasing coverage through the Marketplace cannot trigger an employer shared responsibility payment.

The Employer Shared Responsibility Provision Estimator helps employers understand how the provision works and learn how the provision may apply to them. Employers can use the estimator to determine:
  • The number of full-time employees, including full-time equivalent employees,
  • Whether an employer might be an applicable large employer, and
  • For employers that are an applicable large employer, an estimate of the maximum amount of the potential liability for the employer shared responsibility payment that could apply, based on the number of full-time employees reported if an employer fails to offer coverage to its full-time employees.
Six Things Employers Can Think About Now
  1. The health care law requires ALEs to report information about health insurance coverage offered to its full-time employees and their dependents as well as to the IRS. 
  2. ALEs must report information about themselves, the coverage they offered - if any - and the individuals covered under the policy.
  3. ALEs are required to furnish a statement to each full-time employee that includes the same information provided to the IRS by January 31, 2017.
  4. ALEs that file 250 or more information returns during the calendar year must file the returns electronically. 
  5. ALEs must file Form 1095-C, Employer-Provided Health Insurance Offer and Coverage with the IRS annually, no later than February 28, 2017 or March 31, 2017 if filed electronically. Forms 1095-C are filed accompanied by the transmittal form, Form 1094-C.
  6. Self-insured employers that are applicable large employers, and therefore are also subject to the information reporting requirements for offers of employer-sponsored health insurance coverage, must combine reporting under both provisions by filing a single information return, Form 1095-C, and transmittal, Form 1094-C.
Applicable large employers can find a complete list of resources and the latest news at the Applicable Large Employer Information Center
Please contact us with any questions.

Thank you, 
George Knox, CLU, ChFC
214.695.2904 (mobile)  214.443.1400 (office) |  george@insuranceisboring.com

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a 'covered opinion' or other written tax advice and should not be relied upon for any purpose other than its intended purpose.
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