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New Reporting Requirements for Employers Under the PPACA

Posted 12:00 PM by

The Patient Protection and Affordable Care Act (PPACA) imposes new reporting requirements on those that provide – and those that are required to provide – minimum essential coverage for the upcoming filing season*. Minimum essential coverage is the type of health insurance that individuals are required to have in order to avoid paying a tax penalty.

Under the PPACA, Applicable Large Employers (ALEs) are required to offer substantially all full-time employees minimum essential coverage. Depending on whether an employer is an ALE or a small employer, filing of new information returns may be required.

  • An ALE is an employer with 51 or more full-time equivalent employees (FTEs).
  • Generally, a small employer is one that has fewer than 51 FTEs. If, however, a small employer is considered a member of a controlled or affiliated services group, then it will be considered an ALE under the PPACA. For purposes of this article, the term “small employer” refers to employers with fewer than 51 FTEs that are not members of a controlled or affiliated services group.

The new reporting requirements include two series of forms:

  1. Form 1094-B and Form 1095-B (B series)
  2. Form 1094-C and Form 1095-C (C series)

The B series forms report whether an individual was covered by a health plan that constituted minimum essential coverage. The C series forms report whether an ALE offered minimum essential coverage and can report whether an individual was covered by minimum essential coverage.

Both B and C series contain a transmittal form (1094-B or 1094-C) that reports information with regard to the filing entity and includes the number of Form 1095s that are being issued. The Form 1095s (both B and C) provide detailed information about coverage offered to the individual.

For calendar year plans, all of the forms are due to the IRS on or before Feb. 28, 2016, if paper filed, or on or before March 31, 2016, if electronically filed. An entity will receive an automatic 30-day extension by completing Form 8809 by the original due date. It should be noted that if the entity is required to file more than 250 Form 1095s, electronic filing is mandatory. Although the forms are not due to the IRS until February, Forms 1095-B and 1095-C are due to employees by Jan. 31, 2016.

The B series forms must be filed by “every person that provides minimum essential coverage to an individual.” Generally, this means that if an employer offers a fully insured health plan, the insurance provider will prepare and submit the B series forms.

If, on the other hand, an employer offers a self-insured plan, the employer must complete and submit the B series forms. A Form 1095-B must be filed for every individual that is covered under the plan. Therefore, if a small employer offers coverage to an employee but that employee declines the coverage, no Form 1095-B needs to be filed.

The C series forms are required to be filed by ALEs. A Form 1095-C must be filed for each employee who was a full-time employee for any month of the calendar year. This means that even if the ALE does not offer a plan or the employee declines coverage, a Form 1095-C must still be filed for that employee.

If an ALE offers an insured plan, it must still file Form 1095-C but should not complete Part III. If an ALE offers a self-insured plan, it may complete Form 1095-C, Part III in lieu of Form 1095-B for its full-time employees. Since Form 1095-C is not required for part-time employees, if a part-time employee accepts coverage from a self-insured plan offered by an ALE, then the ALE must complete the B series forms.

Lastly, it should be noted that even though transitional relief from penalties is available for 2015 (filing dates in 2016) for ALEs with 51-99 employees, the reporting requirements do not provide any such relief. Therefore, employers that employ 51-99 employees are still required to file new forms even though they may not be subject to § 4980H penalties. Failure to properly file the new information returns is $250 per return not to exceed $3,000,000.

Key takeaways:

  • Employers are subject to new reporting requirements for health plans.
  • The new information returns (B and C series forms) are due Feb. 28, 2016, if filed by paper or March 31, 2016, if electronically filed.
  • The information returns must be furnished to employees by Jan. 31, 2016.
  • Small employers only need to file the new forms if a self-insured plan is offered and at least one individual enrolls in that plan.
  • ALEs must file Form 1095-C for every full-time employee that was employed on any day during the year, regardless of whether coverage was offered, declined or accepted.
  • If an ALE offers a self-insured plan, it may file Form 1095-C, Part III instead of Form 1095-B.

*Returns due in 2016 for the 2015 calendar year.

About the Author
Ryan Miller is a partner in Katz, Sapper & Miller’s Tax Services Group. Ryan identifies innovative solutions to minimize taxes for his clients. Additionally, he oversees the international aspects of the firm’s tax practice helping companies and individuals navigate the complexities of doing business abroad.


About the Author
Stephen Schnelker is a manager in Katz, Sapper & Miller's Tax Services Group. With a strong background in analytical research, Stephen brings his extensive tax law knowledge to help clients minimize tax liabilities and ensure tax compliance. Connect with him on LinkedIn.

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