Which employers are subjected to the ACA Reporting Requirement?

When it comes to reporting to the Internal Revenue Code, there are two main sections of it. The Code Section 6055 is for employers that provide minimum essential coverage (MEC) to their workforce during the reporting year. It is supposed to have selective information about the health coverage and has to be shared with the IRS and the individual involved. All employers are subject to report under the CODE Section 6055 if their health plan is self-funded.

An ALE refers to an employer that has 50 or more full-time employees. If you are an ALE and don’t understand the requirements, an ACA reporting Quick Reference has been prepared to help you out. Your status as an ALE is determined each year and depends on the size of the workforce you had in the preceding year. If there is any waiting period involved, the employers are not mandated to include that information. The employer’s share of total allowed benefit costs of a plan is also not a requirement.

A full-time employee is one that has 30 working hours per week or 130 working hours during a month.

All ALEs are supposed to share information about the health coverage being offered to full-time employees in the previous year. The previous year in this regard is considered to be the ‘reporting’ period. The required information has to be shared with the recipient of the plan, the employee that is.

If an ALE decided to sponsor a self-funded Health Plan, they must satisfy the reporting requirements under Code Section 6055 and 6056 for all its full-time employees whether they are being covered by the plan or not. The information has to be submitted in a combined report as part of Form 1094-C and 1095-C.

You will find the requirements posted under the Publications section of the PEBA Website. There are guides available on what forms have to be submitted to the IRS and what information is necessary to be filed.

ALEs are required to file Form 1094-C and 1095-C (Part III) for all employees and their dependents registered in the plan during any month of the reporting year.

For ALEs that sponsor self-funded health plans of non-employees, the reporting has to be filed under form 1094-C and 1095-C or Form 1094-B and 1095-B to satisfy the requirements of Code Section 6055. Non-employees refer to those individuals who were not employees of the entity for the reporting year. They can wither be retirees, COBRA participants or survivors.

For those employers who fall into the category of a non-ALE and sponsors a self-funded health plan, the reporting will be filed under 1094-B and 1095-B. The information shared by the employers will cover both employees and non-employees.

What are the aims and objectives of the Affordable Care Act (ACA) reporting requirements?

There are provisions that need to be taken care of under the Affordable Care Act and assist the Internal Revenue Service (IRS) in a certain regard. The information that is required by the IRS seeks to answer a number of questions such as:

- Which Individuals are either eligible or ineligible for subsidized health insurance in terms of the Individual Health Insurance Exchange?
- What type of health coverage is being offered by a large employer?
- Does the health coverage being offered by the large employer meet the requirements of the ACA’s employer mandate?
- What sort of penalties are large employers subject to, in case they don’t fulfill the requirements.
- Which individuals are registered in coverage that meets the ACA mandate for individuals?

Forms to be submitted to the IRS by Employers

In order to fulfill the reporting requirements under Code Section 6065, it is mandatory that an ALE files Form 1094-C and 1095-C. This requirement is for employers that sponsor a full insurance plan and must include details of all employees regardless of their enrollment status.

The compulsory reporting under Code Section 6055 on Form 1094-B and Form 1095-B is supposed to be filled in by the insurer. The insurer is also supposed to share details on eligible retirees, COBRA subscribers, and the state where the employer is located in. The State will be considered the survivor of the ALE.

There are a number of employers that take part in the State Health Plan pursuant to S.C. Code Ann § 1- 11-710. They include educational sector entities such as public universities, public school districts, and a few public corporations. For any non-Medicare eligible retirees, survivors and COBRA subscribers, these employers may select PEBA as its Designated Governmental Entity (DGE). The DGE is responsible for filing returns and statements required.

Submission of forms for Active Employees of the State ALE

Different entities are responsible for different categories of employees. In case the employees are active, the Comptroller General’s office is responsible to report on behalf of them and their dependents. If the employees are former non-Medicare eligible retirees, survivors and COBRA subscribers, in that case, PEVA will report for them and their dependents.

Essentials of ACA Reporting

There are some essentials that need to be kept in mind by employers and other parties involved in ACA Reporting which are as follows:

- The responsibility of keeping track of coverage benefits and offers for employees lies with the agencies.
- For reporting to the IRS, there should be one comprehensive record for all active employees of the State.
- The responsibility of compiling and submitting the forms of employees does not lie with Individual State Agencies but with the reporting entity for the State. The PEBA will provide the employers with an electronic file of all information to facilitate them.

If you are a non-ALE entity, you must report about your employees who are covered by the plan under Code Section 6055. The PEBA shall provide electronic documents even in this case so that reporting obligations can be satisfied as per Part IV of the 1095-B.

The files are placed in EBS by the last week of December and are in the tilde delimited text file format. Any additional requirements are added and the file is refreshed each Friday before the form submission deadline.

Many companies rely on ACAreporter for their reporting needs. If you need any assistance in ACA reporting. Contact us!