Show the IRS that you take the new 1094c and 1095c forms seriously by following the lead of other tax-savvy organizations and filing on time with a complete understanding of how these forms work, why they were created and what they replace when it comes to your employees.
“The new information reporting system is similar to the current Form W-2 reporting system in that an information return (Form 1095-B or 1095-C) will be prepared for each applicable employee, and these returns will be filed with the IRS using a single transmittal form (Form 1094-B or 1094-C). Electronic filing is required if the employer files at least 250 returns. Employers must file these returns annually by Feb. 28 (March 31 if filed electronically). Therefore, employers will be filing these forms for the 2015 calendar year by Feb. 28 or March 31, 2016. A copy of the Form 1095, or a substitute statement, must be given to the employee by Jan. 31 and can be provided electronically with theemployee’s consent. Employers will be subject to penalties of up to $500 per return for failing to timely file the returns or furnish statements to employees.”
Experts at McGladrey break down what you need to know about the new 1095c/1094c forms:
This means that if your company has more than 250 returns to file this year, you need to read up on just how to navigate these new forms and how to file them before the deadline electronically.
These forms are required to be in compliance with the Affordable Care Act. Anyone with over 50 employees is likely to have to fill out these forms.
Benefits Glossary: Applicable large employers are those that had, on average, at least 50 full-time employees (including full-time equivalent employees) during the preceding calendar year.
There are some exceptions to the rule.
For example, a large company with a union that does NO reporting on behalf of its employees would not be required to fill out these forms.
More precisely, if the union administers benefits for their members and the employer does not take EE deductions, the union is responsible for reporting.
To prepare for the reporting of these forms, employers should take steps now and have a form for any employee to sign to validate the employer offered coverage upon hiring, and the employee either declined or accepted.
Validating records of coverage offers is a good best practice going forward.
Learn what you need to do to prepare for the new 1095c/1094c forms upon hiring:
The IRS also recommends these monthly tracking initiatives to assist in ACA compliance. To prepare for 2016, applicable large employers need to track information each month in 2015, including:
● Whether you offered full-time employees and their dependents minimum essential coverage that meets the minimum value requirements and is affordable.
● Whether your employees enrolled in the self-insured minimum essential coverage you offered.
You need to track this information because you could be subject to an employer shared
responsibility payment if either:
● You offered coverage to fewer than 70% (for 2015; after 2015 this threshold changes to 95%) of your full-time employees and their dependents and at least one full-time employee enrolled in coverage through the Health Insurance Marketplace and receives a premium tax credit, or
● You offered coverage to at least 70% (for 2015) of your full-time employees and their dependents, but at least one full-time employee receives a premium tax credit (because coverage offered was not affordable, did not provide minimum value or the full-time employee was not offered coverage). After 2015, this threshold changes to 95%.
To learn more about how your organization can offer comprehensive benefits to your employees and stay in compliance with workforce and tax laws, please schedule a free consultation with The Olson Group.
We’ll help you design a plan that is right for your employees and for you. Cambridge does not offer tax advice.