Affordable Care Act (ACA)
Mandatory IRS Reporting
With the passage of the Patient Protection and Affordable Care Act (ACA) on March 23, 2010, certain employers became required to offer qualifed health insurance to their employees and report their compliance to the Federal Government.
This new ACA Reporting has therefore been due every year since 2015 by Applicable Large Employers, which are those that average the employment of greater than 50 full-time/equivalent employees in a calendar year. The reporting has three components:
- 1095-C/1095-B: Unique for each employee, this is a paper form summarizing the employee's unique health insurance offer, cost, and enrollment information.
- 1094-C/1094-B: A single summary form ("transmittal") that aggregates the employer's information with employee headcounts and a listing of related entities.
- Electronic XML File: For employers with more than 10 forms, the 1095/1094 data must be converted to XML and electronically filed into the IRS AIR system.
The consequences of ignoring this reporting are steep: "Intentional Disregard" for the preparation, filing, and distribution of these forms can cost $660 for each form not filed. The IRS will send a non-filing notice to employers based on the number of W-2s received.
Who files, and how?
For many employers, ACA Reporting is an add-on module in your payroll, accounting, or HCM package. However, depending on your provider(s), this may not be included, or may be too costly for you to add. 1095EZ can be your standalone solution to keep the IRS off your back!