New Tax Reporting Requirements Implemented to Report Participation in the Affordable Care Act

Affordable Care Act reporting requirements place additional reporting and printing burdens on employers

Beginning January 2016, the Affordable Care Act's Employer Shared Responsibility Rule will require employers to file annual information returns with the IRS and deliver employee statements containing information about health plan coverage. This reporting requirement is in addition to reporting health care costs on Form W-2.

IRS Code Section 6055 requires health insurers and employers to provide enrolled employees and former employees with information that shows who has minimum essential coverage (MEC). Employees will use this information to complete their federal tax returns... and those who do not have MEC may receive a penalty on their federal tax returns. (MEC is a requirement under Obamacare in order for people to avoid the Shared Responsibility Tax.)

IRS Code Section 6056 requires health insurers and employers to provide the IRS a list of employees who were provided MEC during a calendar year. An Applicable Large Employer (ALE) can be penalized if they do not offer minimum essential coverage to full-time employees or the coverage is too expensive and the employee purchases coverage on the Exchange Marketplace. ALE is defined as a business with 50 or more full-time employees.

Who must report?

  • Applicable large employers (ALEs)

  • Self-insured employers

  • Insurers

  • A third party may complete reporting requirements but liability remains with the employer

  • Those that file 250 or more of Form 1095-C must file electronically


    Who must send recipient copies?

  • Applicable large employers (ALEs)

  • Self-insured employers

  • Insurers

  • Electronic delivery is allowed if recipient gives consent

    What are the fines for failing to report?

    If an employer fails to file and issue statements to covered individuals, they may face penalties of $250 per filing up to $3.0 million.

    The bottom line is that this is a significant change in reporting requirements. And new tax forms will be needed. Large employers need to start planning now for how they will print and deliver recipient copies. If planning on printing themselves, companies need to work with a forms manufacturer that can provide IRS-approved print stock.

Since this is a new, complex reporting requirement, many companies are looking to outsource the processing of ACA forms. If outsourcing, companies need to partner with a reliable print house. Since the ACA forms contain protected health information (PHI), working with a print house that is SOC-certified and HIPAA compliant is recommended.
Contact mdnavarro@complyright.com for more information.
About ComplyRight Distribution Services Comprised of TFP Data Systems and Apex Business Systems, ComplyRight Distribution Services is the leading provider of government-compliant products and services -- tax forms and software, W-2 and 1099 e-filing services, health insurance claim forms, labor law posters and more -- for print brokers, dealers, distributors and resellers. With more than 45 years' experience, ComplyRight maintains relationships with numerous government agencies to ensure full compliance of product lines. The company has manufacturing locations in California and Pennsylvania, and distribution points in Minnesota and Florida.