Beginning in 2016, the Affordable Care Act (ACA) requires certain employers to report health coverage information to the IRS and to furnish a statement about health coverage to their employees on an annual basis. The IRS will use the information to enforce the ACA's "shared responsibility" provisions (sometimes referred to as the individual and employer mandates) and to administer premium tax credits. The reporting requirements differ based on the size of the employer and the type of coverage the employer sponsors.

Deadlines: For the 2015 calendar year, the forms must be filed with the IRS no later than May 31, 2016 (or June 30, 2016, if filed electronically). However, you must furnish a copy to your employees (and certain other non-employees) by March 31, 2016. In subsequent years, the forms must generally be filed with the IRS by the last day in February (or March, if filed electronically) and provided to your employees by the last day in January.

Glossary:

A number of factors must be considered when determining whether you are subject to these reporting requirements, including whether you are part of a controlled group and the type of coverage that you provide. Here we define some key terms:

• Controlled Groups: A group of employers treated as a single employer under section 414(b), (c), (m) or (o) of the Internal Revenue Code are counted as a single employer to determine whether together they employed 50 or more full-time and FTE employees in the prior calendar year. However, each individual employer is required to separately report with respect to its common law employees.
• Fully Insured Coverage: Generally, the insurance company assumes the health insurance risk. Most small to mid-size employers offer fully insured health plans.
• Self-insured Coverage: Generally, the employer assumes the risk and pays participants' claims out of its general assets or a trust.
• Level-funded Coverage: Generally, a type of self-insured plan where rates are based on group experience. They typically have fixed monthly payments that are used to pay claims and maintain stop-loss coverage. For instance, one year rates may be low due to a healthy population of the group but that could change in the next year due to illness/injury in the group.

Small Employers (Fully Insured):

Who handles reporting? Your insurer.

If you offer a fully insured health plan and had less than 50 full-time and full-time equivalent (FTE) employees in the 2014 calendar year (or during a shorter transition period for 2014), you are not required to file these forms. Your insurer is responsible for filing the required forms with the IRS and furnishing a statement to your employees.

Small Employers (Self-Insured, including Level-Funded):

Who handles reporting? The employer.

Generally, if you had fewer than 50 full-time and FTE employees in the 2014 calendar year and have a self-insured health plan (including a level-funded plan), you must complete and furnish Forms 1095-B to the enrolled individuals and file Forms 1095-B and 1094-B (transmittal) with the IRS.

What to report on Form 1095-B:

• Part I: The individual's name, Social Security Number (SSN) or date of birth if the SSN is unavailable, and address, and a letter identifying that the coverage is employer-sponsored coverage;
• Part III: Your company's name, employer identification number (EIN), address, and phone number;
• Part IV: Each covered individual's (including the employee and his or her spouse and/or dependents) name, SSN or date of birth (if SSN is unavailable), and the months he or she was covered by the plan for at least one day.

Note: Employers reporting self-insured coverage (or level-funded coverage) do not complete Part II of the 1095-B.

Small Employers (No Insurance):

Who handles reporting? Reporting is not required.

Generally, if you had fewer than 50 full-time and FTE employees in the 2014 calendar year and don't offer health coverage, you are not subject to these reporting requirements.

Large Employers (Fully Insured):

Who handles reporting? The employer and the insurer.

Generally, if you had 50 or more full-time and FTE employees in the 2014 calendar year and offer fully insured health coverage, you must complete and file Forms 1095-C and 1094-C.

Forms: Complete and furnish Form 1095-C (Parts I and II completed) to full-time employees and file Forms 1094-C and 1095-C with the IRS. Do not complete Part III of the 1095-C; the insurer will report the coverage information on Forms 1094-B and 1095-B. You must furnish and file a 1095-C for each employee who was a full-time employee (30 or more hours on average per week) for any month of the calendar year.

What to report on Form 1095-C:

• Employee's name, SSN, and address;
• Employer's name, EIN, telephone number, and address;
• For each month, a code indicating whether coverage was offered and to whom it was offered (e.g., employee only; employee and dependents);
• The employee's share of the monthly premium for the lowest cost self-only coverage (in certain cases, this line can be left blank);
• For each month, a code indicating that a 4980H safe harbor or other situation applied (e.g. the employee enrolled in coverage or was not a full-time employee).

Large Employers (Self-Insured, including Level-Funded):

Who handles reporting? The employer.

Generally, if you had 50 or more full-time and FTE employees in the 2014 calendar year and offer self-insured or level-funded health coverage, you must complete and file Forms 1095-C and 1094-C.

Forms: Complete and furnish Form 1095-C to full-time employees (whether or not enrolled in coverage) and any part-time employees (or certain other non-employees, such as retirees) enrolled in coverage and complete and file Forms 1095-C and 1094-C with the IRS.

• For full-time employees not enrolled in the self-insured coverage for any months of the year, only complete Parts I and II of Form 1095-C.
• For full-time employees enrolled in the self-insured coverage for any months of the year, complete Parts I, II, and III.
• For part-time employees and other enrolled non-employees (such as retirees who were not full-time employees for any part of the year), complete Part I, line 14 of Part II, and Part III.

What to report: See the Large Employers (Fully Insured) section above for data elements required. For Part III, report each covered individual's (such as the employee and his or her spouse and/or dependents) name, SSN or date of birth (if SSN is unavailable), and the months he or she was covered by the plan for at least one day.

Large Employers (No Coverage):

Who handles reporting? The employer.

Generally, if you had 50 or more full-time and FTE employees in the 2014 calendar year and don't offer health coverage, you must complete and file Forms 1095-C and 1094-C.

Forms: Complete and furnish Form 1095-C, Parts I and II to full-time employees and complete and file Forms 1095-C and 1094-C with the IRS. You must file a 1095-C for each employee who was a full-time employee for any month of the calendar year.

How to Prepare:

If your company is subject to these reporting requirements, start gathering necessary data in order to meet the applicable deadlines. If you file late, you may be subject to a penalty up to $250 per form ($500 if both the forms issued to the individual and to the IRS are late).

Also, consider how you will communicate information about the new form to employees. Because employees will receive the form for the first time in 2016, consider letting employees know that they will need to use the information to prepare their 2015 tax return. If your insurer is responsible for providing the forms, consider coordinating your communication strategy with your insurer.