Yes, the IRS is granting some relief for ACA compliance in 2015! Yes, the IRS is lowering the percentage of full-time employees and their dependents who need to be offered coverage from 95% to 70%. And yes, this will help Applicable Large Employers (ALE’s) avoid one of the potential penalties or assessments. BUT… don’t get too comfortable with all this relief! Regardless of whether the business qualifies for transition relief, all ALEs must follow the reporting requirements for the entire calendar year. Employers that make a “qualifying offer” to at least 95% of their full-time employees and their spouses and children, will be able to use the simplified reporting for all their employees, including any employees who do not receive a qualifying offer for the full year. Employers will provide employees with a standard statement relating to their possible eligibility for premium tax credits. A cautionary warning: the qualifying offer to at least 95% relates only to the reporting requirements. Do not to confuse this 95% with the required offer of coverage to at least 70% to of full-time employees to avoid the $2000 penalty for employers subject to the Employer Mandate for 2015. It would be prudent to interpret this stipulation to mean the employer must still offer coverage to 95% of their employees, but the employer can use the alternative reporting if they have offered coverage to 70% of their employees as well. Regardless, the Employer Shared Responsibility rules under the ACA are now effective for employers with 100+ full-time or full-time equivalent (FTE) employees. These employers are subject to penalties if any FTE receives a premium tax credit or cost-sharing reduction and either (1) the employer fails to offer minimum essential health coverage to substantially all (70% in 2015 and 95% in 2016) FTEs, or (2) the employer offers minimum essential health coverage to substantially all FTEs, but the coverage is either not affordable or does not afford minimum value. Employers with between 50 and 100 FTEs must certify to the government they have not dismissed employees to get under the threshold and, thereby, qualify for the delay until 2016. The following bullets are reminders of the standard 6056 data for ALEs (if employer does not qualify to use a simplified reporting method):
- Employer name, address, and Tax ID;
- Name and phone number of employer’s contact person;
- Calendar year for which the information is reported;
- Whether the employer provided minimum essential coverage (MEC) to full-time employees and their dependents;
- Months minimum essential coverage was available;
- Each full-time employee’s monthly cost for employee-only coverage under the employer’s minimum value plan;
- Number of full-time employees for each month;
- Name, address, and tax ID of each full-time employee during the year and the months the employee was covered; and
- Any other information specified in forms, instructions, or published guidance
To summarize, regardless of the relief provided, 2015 reporting requirements are still in force and employers must be ready to report qualifying offers appropriate to the ACA mandate based on their employee size and types. Information provided in this blog concerning the Affordable Care Act is not legal advice and should not be treated as such. If you have questions about how the Affordable Care Act will affect you as an employer, please consult legal counsel.
