Confused about ACA reporting requirements? IRS explains what you need to know

The IRS has released a reminder that calculating the number of employees is especially important for employers that have close to 50 employees or whose work force fluctuates during the year. That’s because these applicable large employers, or ALEs, must offer their full-time employees and dependents affordable health coverage that provides minimum value. Here are some other reminders from the IRS for both ALEs and for employers with fewer than 50 employees.

Applicable large employers.
ALEs with exactly 50 employees can buy insurance through the Small Business Health Options (SHOP) marketplace. All ALEs must file an annual return, the first of which are due to be filed and furnished in 2016 for 2015, reporting whether they offered health insurance and, if so, what insurance it was. They must also provide a corresponding statement to each full-time employee.

Under the employer shared responsibility provisions of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), ALEs that fail to offer affordable coverage that provides minimum value to their full-time employees and their dependents will be subject to penalties if one or more of their full-time employees gets a premium tax credit. Transition relief is available for 2015, including relief for ALEs with fewer than 100 full-time employees.

Small employers. Small employers with fewer than 50 full-time employees or full-time equivalent employees are not subject to the ACA’s shared responsibility provisions.
Small employers who cover at least 50% of employees’ premium costs, and who have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000 may be eligible for the small business health care tax credit if they purchase their coverage through the Small Business Health Options Program.

Self-insured coverage. The ACA provides that all employers that provide self-insured health coverage must file an annual return for individuals they cover and provide a corresponding statement to responsible individuals. Again, annual information returns are due to be filed and furnished in 2016 for 2015.

SOURCE: IRS Health Care Tax Tip 2015-46, August 4, 2015

Visit our News Library to read more news stories.