Affordable Care ActAffordable Care Act

Reporting Reporting RequirementsRequirements

Presented by:

Winston Truett, CPA Partner

Certified Public Accountants

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Define A L E

ALE - Applicable Large Employer

An employer that employed an average of 50 or more full-time employees on business days during the preceding calendar year.

What is a Full-Time Employee?An employee who is employed for an average of at least 30 hours per week or 130 hours per month or 1,560 hours per year.

Number of Full-Time Equivalent (FTE) Employees

Reflects the number of full-time employees an employer would have based on the hours for all employees who are not full-time.

Hours of Service for all Non-Full-Time

Employees

Equivalent Employees(round monthly result to nearest

one hundredth)

January /120=

February /120=

March /120=

April /120=

May /120=

June /120=

July /120=

August /120=

September /120=

October /120=

November /120=

December /120=

Total Equivalent Employees

Are you an ALE?1. Calculate the number of

Full-Time Employees and the Full-Time Equivalent (FTE) value of all employees for each month of the applicable year. (see above tables)

Are you an ALE?2. Add Totals of Full-Time

Employees and FTE values.

3. Divide by 12. If not a whole number, round down. i.e. 49.6 = 49

Are you an ALE?If less than 50 in 2014, employer is NOT an ALE.

If 50 or more in 2014, employer IS an ALE.

You’re an ALE. Now what?You must offer affordable health insurance coverage that meets certain criteria ONLY to full-time employees (and their dependents) or pay a penalty.Remember, a full-time employee works at least 30 hours/week or averages 130 hours/month.

If…. And…. Then….

IF you have a new employee

AND you expect them to be full-time

THEN, you must offer employee coverage within the first 3 months of employment

If not….You have up to 12 months to determine full-time status for variable hour and seasonal employees.

ALE Reporting Requirements

Beginning in 2015, ALEs must file a return with the IRS that reports the terms & conditions of health care coverage provided to full-time employees.

ALE Reporting….Every ALE must file certain information with the IRS for each full-time employee.

Self-insured plan: 1094-B & 1094-C

All other plans: 1095-B & 1095-C

Small Employer Reporting Non-ALEs that sponsor health plans do NOT report as a provider of health coverage under IRS Section 6055. The health insurance carrier/issuer is responsible for reporting that coverage.

Certifications of Eligibility:A.Qualifying Offer MethodB.Qualifying Offer Method Transition ReliefC.Section 4980H Transition ReliefD.98 % Offer Method

Qualifying Method:• Employer must certify that for all

months during the year when the employee was full-time the employer made a Qualifying Offer

Qualifying Offer MethodTransition Relief:• Employer must certify that it made a

Qualifying Offer for one or more months of calendar year 2015 to at least 95% of its full-time employees.

Section 4980HTransition Relief:Either

•ALE with fewer than 100 Full-Time Employees, including FTEs

•ALE with 100 or more Full-Time Employees, including FTEs

98% Offer Method:• Employer must certify that it offered

for all months of the year, affordable health coverage to at least 98% of its employees & their dependents for whom it is filing a 1095-C employee statement.

Note: If an employer uses this method, it is not required to complete the “Full-Time Employee Count” in Part III column (b)

1095-C to EmployeesALEs must furnish to each full-time employee on or before Jan. 31 of the year immediately following the calendar year to which the information relates.MUST BE provided on paper by mail, unless recipient agrees to electronic copy.

Deadlines & Penalties• Forms 1094-C & 1095-C must be

filed with the IRS on or before Feb. 28 (March 31, if filed electronically)

• Penalties: $30-100 for each incorrect Form 1095-C

• Penalties may be waived for a reasonable cause

Who actually files these forms?

Don’t forget the W-2sEmployers are required to report the cost of the employer contribution to health coverage on an employee’s Form W-2 in box 12, using code DD.

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Questions?

Winston Truett, CPA731.427.8571wtruett@atacpa.net