Employer Reporting Under the ACA

The Affordable Care Act obligates some employers to make reports to the federal government about health care benefits provided to employees. The government wants these reports to determine if all employees entitled to employer-provided insurance are in fact receiving appropriate insurance.

Some Trust Funds simply advise employers to rely on their own attorneys to determine what to file. Others offer advice to employers, but with sufficient disclaimers so they are not responsible if either the Trust Fund or an employer actually makes mistakes or does this wrong. With these limitations and considerations in mind, here is a summary of some of the salient points of what employers are supposed to do—however, this summary should not be relied on by employers, who should consult their own attorneys on this subject.

Reporting on Health Insurance Coverage Offered
Applicable large employers, employing 50 or more full-time equivalents during the prior calendar year, must file annual returns with the IRS to report health care coverage offered to full-time employees (130 hours a month or more) and their dependents.  Recently the IRS released draft Forms for this reporting.  A separate return is required for each full-time employee, accompanied by a single transmittal form for all the returns filed for a given calendar year.   This information return is used to assess the employer shared responsibility provisions of section 4980H of the IRC.

This reporting is required for all employers with 50 full-time equivalents or more.  However, there is transitional relief for employers with at least 50 full-time employees but less than 100 full-time employees from the assessment of a shared responsibility payment under section 4980H.  It does not relieve employers from the reporting requirement, but it relieves them from having to pay these penalties.

Also, employers generally will be treated as having met their obligations under section 4980H with respect to a full-time employee if the employer is required by a collective bargaining agreement (or participation agreement) to contribute on behalf of that employee to a multiemployer plan that provides coverage to individuals who satisfy the plan’s eligibility conditions that meets the affordability and minimum value requirements and offers coverage to those individuals’ dependents. 

The plan administrator can, but is not required to, assist in or prepare the returns pertaining to full-time employees covered by a CBA who are eligible to participate in the plan. Each Trust Fund has to decide how far it wants to go in providing this kind of aid so that it does not incur liability for going too far.  The employer would still need to complete the reporting as to its remaining full-time employees not covered under the multiemployer plan.  Ultimately, the employer is the responsible party for making sure this reporting requirement is met.

Form W-2 Reporting
Some employers  are also required to report the cost of coverage under employer-sponsored group health plans on an employee’s W-2.  This reporting is for informational purposes only.  Currently, employers that issued fewer than 250 W-2s in the previous year are exempt from this reporting. 
Also, currently an employer is not subject to this reporting requirement for employees who are provided coverage through a multiemployer plan.  This will continue until further guidance is issued by the IRS.

If an employer has specific questions regarding how these provisions apply to its specific circumstances, the employer should consult its legal counsel.  Also, http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-for-Employers is a good resource for employers interested in finding out more information.

By Bill Sokol | August 13, 2014

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