Employers and the ACA

Overview of the Employer Shared Responsibility Provisions

The Affordable Care Act contains specific responsibilities for employers. The size and structure of your workforce – small, large, or part of a group – helps determine what applies to you. Employers with 50 or more full-time equivalent employees will need to file an annual information return reporting whether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions. All employers that are applicable large employers are subject to the Employer Shared Responsibility provisions, including federal, state, local, and Indian tribal government employers.

An employer’s size is determined by the number of its employees. Generally, if your organization has 50 or more full-time or full-time equivalent employees, you will be considered a large employer. For purposes of this provision, a full-time employee is an individual employed on average at least 30 hours of service per week. 

Under the Employer Shared Responsibility provisions, if an applicable large employer does not offer affordable health coverage that provides a minimum level of coverage to their full-time employees and their dependents, the employer may be subject to an Employer Shared Responsibility payment. They must make this payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage through the Health Insurance Marketplace.

The Employer Shared Responsibility provisions generally are effective at the beginning of this year. Employers will use information about the number of employees they have and those employees’ hours of service during 2014 to determine if they are an applicable large employer for 2015. 

If you are a self-insured employer – that is, an employer who sponsors self-insured group health plans – you are subject to the information reporting requirements for providers of minimum essential coverage whether or not you are an applicable large employer under the employer shared responsibility provisions.

For more information, visit the employer shared responsibility page. For information about transition relief available for employers related to the shared responsibility provision, visit IRS.gov/aca.

 

Self Insured Employers have to file Health Coverage Info Returns also!

Self-Insured Employers Must File Health Coverage Information Returns

Regardless of size, all employers that provide self-insured health coverage to their employees are treated as coverage providers. These employers must file an annual return reporting certain information for each employee they cover.

As coverage providers, these employers must:

• File a Form 1095-B, Health Coverage, with the IRS, accompanied by a Form 1094-B transmittal. Filers of more than 250 Forms 1095-B must e-file. The IRS allows and encourages entities with fewer than 250 forms to e-file.
• Furnish a copy of the 1095-B to the responsible individual – generally the primary insured, employee, parent or uniformed services sponsor. You may electronically furnish the Form 1095-B.

If a provider is an applicable large employer also providing self-insured coverage, it reports covered individuals on Form 1095-C instead of Form 1095-B. Form 1095-C combines reporting for two provisions of the Affordable Care Act for these employers.
The information reporting requirements are first effective for coverage provided in 2015.  Thus, health coverage providers will file information returns with the IRS in 2016, and will furnish statements to individuals in 2016, to report coverage information in calendar year 2015.
The information that a provider must report to the IRS includes the following:

• The name, address, and employer identification number of the provider.
• The responsible individual’s name, address, and taxpayer identification number, or date of birth if a TIN is not available.  If the responsible individual is not enrolled in the coverage, providers may, but are not required to, report the TIN of the responsible individual.
• The name and TIN, or date of birth if a TIN is not available, of each individual covered under the policy or program and the months for which the individual was enrolled in coverage and entitled to receive benefits.

For more information, see Questions and Answers on Information Reporting by Health Coverage Providers on IRS.gov/aca.  Employers who provide self-insured coverage should review Publication 5125, Responsibilities for Health Coverage Providers. Applicable large employers should review Publication 5196, Reporting Requirements for Applicable Large Employers

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