A 'plain English' look at looming ACA tax compliance

Dive Brief:

The Obamacare tax reporting requirements issued by the IRS have many employers confused, and a recent article at HRMorning.com offers some ideas on how to cut through the complications.
Even knowing who has to follow the reporting rules can be confusing from the jump. The reporting requirements apply to “applicable large employers” (ALE) — those who employ 50 or more full-time or full-time equivalent employees. They also apply to anyone who provides minimum essential health coverage under the law to an individual — this would apply to a very small self-insured employer, for example. Who’s a full-time equivalent employee? Check here for some clarification.
The IRS also says: “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.

Dive Insight:

There are four basic forms - 1094-B, 1094-C, 1095-B, 1095-C - for large employers. According to HRMorning, the reporting system mirrors the current W-2 reporting system in that a 1095-B or 1095-C will be prepared for each applicable employee, and those forms will be filed with the IRS using a transmittal form — 1094-B or 1094-C. Form 1095-C and Form 1094-C will be filed by the ALEs. These forms will be required if the employer offers an insured or self-insured group health plan, or does not offer any group health plan.

HRMorning reports that ALEs must prepare a Form 1095-C for each full-time employee regardless of whether the employee is participating in an employer-sponsored group health plan. In addition, ALEs with self-insured plans will complete a Form 1095-C for each non-full-time employee who’s enrolled in the self-insured health plan. The employer will not prepare a Form 1095-C for non-full-time employees who are not enrolled in a plan. Form 1094-C must be used to transmit Forms 1095-C to the IRS. Form 1095-B and Form 1094-B must be filed by insurance companies to report individuals covered by insured employer-sponsored group health plans. Yes, it is confusing, even in plain English.

Bottom line, check out the article for a basic primer on the ACA's tax filing hurdles. And also visit the IRS's page on reporting for the official version.