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The IRS Releases Draft Affordable Care Act Reporting Forms

By Eric R. Lintala The Internal Revenue Service (IRS) released draft Affordable Care Act (ACA) health insurance reporting forms 1094-C and 1095-C Thursday evening, July 26. Employers will be required to file these forms annually to evidence compliance with the health reform law’s mandates. (Do not rely on these draft forms for filing, but wait until official IRS release. Final forms, when available, will be posted at IRS.gov/downloadforms.) The employer mandate rules apply to all groups with 50 or more full time equivalents (FTEs). FTEs are calculated by counting all employer designated full-time employees, plus all part-time employee hours converted to FTEs.  Employers must then provide affordable coverage to benefit eligible employees, using the 30-hour rule.  There are transitional and ongoing eligibility requirements, as well. Employers will file Form 1094-C with the IRS and Form 1095-C with the IRS and distribute to named individuals. If the health plan is insured, the employer will complete Parts I and II of Form 1095-C.  Self-funded plans must also complete Part III for all covered individuals. Copies of the draft forms can be accessed at IRS.gov/draftforms. Form 1094-C covers employer and their affiliated groups. Data is required for the Minimum Essential Coverage (MEC), FTE count, total employee count, and eligibility method.  Form 1095-C will establish whether the employer coverage is affordable, meets participation requirements, and offers MEC.  Employers will also disclose their employee contribution for the lowest cost single plan offered. The new reporting requirements establish employer ACA compliance and employee affordability for individual compliance. Employer penalties are incurred if an employee does not have qualifying affordable health insurance and then purchases coverage on the exchange and qualifies for a premium tax credit.  The penalty is $3000 per occurrence.  If it is determined that an employer plan does not meet the ACA requirements, there is a $2000 per eligible (30-hour) employee penalty, minus transitional and ongoing exemptions. This is our first look at the mechanics of employer compliance, and the reporting is more detailed than any current health insurance reporting requirement. Please contact us if you would like more information regarding ACA. Eric R. Lintala, CHC, has worked in the healthcare insurance and employee benefits industry for over 25 years, offering strategic insights and actionable advice to navigate the changing and complex healthcare industry. Prior to joining Beltz Ianni & Associates, Eric held management positions with two leading New York health insurance companies. Most recently Eric was Director of Business Development for Health Economics Group, Inc., an independent third party administrator, based in Rochester. Eric serves as a certified trainer for the NY State of Health insurance marketplace. He also earned the Medicare Advantage and Medicare Part D course certification from America’s Health Insurance Plans (AHIP) national trade association. In addition, Eric has worked extensively with dental plans, group benefits, and employee spending accounts including FSAs, HRAs and HSAs. Eric is a graduate of the University of Rochester with a degree in economics and is a Certified Healthcare Consultant (CHC) bestowed by BCBS National Association and Purdue University. He holds a New York State Health and Disability License and serves on the Board of the Western New York Association of Health Underwriters. He has been a member of the Health Executive Committee of Western New York, was a board member of Health for All, Buffalo, New York, and past board advisor for the Lake Plains Community Care Network.    

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