Earlier this week, I moderated an Accounting Today web seminar on Understanding Affordable Care Act Reporting: Year 2.
Janice Krueger, subject matter expert at Greatland Corporation, spoke on ACA mandates, filing requirement deadlines, and what’s new for this year and what’s changed from last year. As the number of questions from the audience demonstrated, the majority of us are still confused by the complexity of the reporting requirements.
For those who weren’t able to tune in, the following are some of the more instructive questions and answers that followed the presentation.
1. When determining if an employer is an ALE (Applicable Large Employer) for 2016 reporting, does the employer use the employee count from 2015 or 2016?
The employer uses the count from 2015. Whether an employer is an ALE is determined each calendar year and generally depends on the average size of an employer’s workforce during the prior year. If an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is not an ALE for the current calendar year. Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting provisions for the current year.
2. If a self-insured employer with less than 50 full-time employees has an employee who waives coverage, is the employer required to file Form 1095-B for the employee?
No, Form 1095-B is not required to be filed for any employee who waives coverage because Form 1095-B is used to show enrolled coverage.
3. How should a self-insured ALE report coverage offered to a non-employee such as a retiree?
Assuming that the person was a non-employee for the entire year, the ALE has two options in how to report this coverage:
• The ALE can file Form 1095-C for the non-employee and enter code 1G on Line 14 and leave Lines 15 and 16 blank, or
• The ALE can file Form 1095-B for the non-employee rather than Form 1095-C.
4. How is an offer of COBRA coverage to a former employee who was terminated reported differently than an employee who was offered COBRA due to a reduction in hours?
An offer of COBRA coverage that is made to a former employee upon termination should not be reported as an offer of coverage on Line 14, Form 1095-C. Code 1H should be reported on Line 14. An offer of COBRA coverage that is made to an employee who remains employed by the employer should be reported as an offer of coverage on Line 14, Form 1095-C, but only for any individual who receives an offer of COBRA coverage. Generally, an offer of COBRA coverage is required to be made only to individuals who were enrolled in coverage and would lose eligibility for coverage due to the COBRA qualifying event, but an employer may choose to extend a similar offer of coverage to a spouse or dependent even if the offer is not required by COBRA.
5. Is an ALE required to enter a code on Line 16 of Form 1095-C?
No. However, an ALE can use Line 16 to indicate whether the ALE qualifies for an exception to a penalty. An ALE should enter the appropriate code on Line 16 if any applies. If no code is applicable for a given month, Line 16 should be left blank.