ACA Employer Reporting

Any great relationship starts with a conversation, so let’s start there.

What is the Employer Mandate?

The employer mandate, also known as the Employer Shared Responsibility provisions of the Affordable Care Act, aims to reduce the number of uninsured people in the U.S. by encouraging employer-sponsored health coverage. As part of the employer mandate, employers of 50+ full-time employees* are required to track employee hours and offer coverage to employees and their dependents up to age 26 as they become eligible. In addition, these employers must file IRS forms on an annual basis to demonstrate that they are in compliance with the ACA.

Identifying Full-Time Employees

A full-time employee is an employee who was employed on average at least 30 hours of service per week. The final rules treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours of service per week. In many cases companies who have a large number of part-time or seasonal employees will calculate these individuals as fractions, which add up to be a number of full-time employees.

There are two methods provided that allow employers to determine whether their employees meet full-time criteria.

Monthly Measurement Method

The monthly measurement method involves a month-to-month analysis in which full-time employees are identified based on their hours of service for each calendar month. This method is not based on averaging hours of service over a prior measurement period. This month-to-month measuring may cause practical difficulties for employers, particularly if there are employees with varying hours or employment schedules, and could result in employees moving in and out of employer coverage on a monthly basis.

Look-back Measurement Method

The look-back measurement method is an optional safe harbor method for determining full-time status that is intended to give employers flexible and workable options and greater predictability for determining full-time employee status. The look-back measurement method involves:

  • A measurement period for counting hours of service
  • A stability period when coverage may need to be provided, depending on an employee’s average hours of service during the measurement period
  • An administrative period that allows time for enrollment and disenrollment

Employers that intend to use the look-back measurement method for determining full-time status for 2016 will need to begin their measurement periods in 2015 to have corresponding stability periods for 2016. However, employers intending to adopt a 12-month measurement period (and, in turn, a 12-month stability period) will face time constraints in doing so.

What can you do now in preparation for ACA IRS reporting?

DON’T WAIT until the last minute to prepare the forms. The due date for 2015 information has been moved back to March 31, 2016 for Form 1095-C and Form 1095-B. Form 1094-B is due June 30, 2016, when filing electronically.

KNOW WHERE to find your information. Is it in your payroll system? Or does your insurance carrier have it?

CONNECT WITH a professional or well-equipped company that can assist in your reporting needs. Preservation Benefit Solutions will assist your company to find a professional while we tailor a plan to meet your needs.

Due Date Requirements
March 31, 2016 Form 1095 copies to Recipients/Employees
May 31, 2016 Paper Copies of Form 1094-C/1095-C to IRS
June 30, 2016 E-file Form 1094-C/1095-C to IRS