Under the Affordable Care Act, large employers are required to file information returns with the IRS and provide statements to full-time employees.
You are a large employer if you employed on average 50 full-time employees during 2014. This number includes full-time equivalent employees as well. You must include employees of other members of your aggregated group if applicable.
A full-time employee is someone who works an average of 130 hours per month.
The number of full-time equivalent employees is determined by averaging the total number of paid hours worked by your employees during a period. For example, let’s say you have five employees who work 40, 35, 35, 25 and 25 hours, respectively, per week. The total number of hours is 160 divided by 40 hours, so these employees count as four full-time equivalent employees.
A company that owns 51 percent of the stock of another company must aggregate the companies’ employees together when determining the average number of full-time employees.
If you are a large employer, you need to track the following information in 2015 so you can meet the reporting requirements of early 2016:
1. Whether you offered full-time employees and their dependents minimum essential coverage that meets the minimum value requirements and is affordable.
2. Whether your employees enrolled in the self-insured minimum essential coverage you offered.
It’s necessary to track the above information so you can meet the following reporting requirements mandated by the Affordable Care Act:
1. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage – Large employers are required to provide this form to all of their full-time employees by Jan. 31, 2016. This form contains basic information about both the employee and the employer. It also provides information about the insurance coverage offered the employee during 2015 and the employee’s share of the premium cost.
2. Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns and Form 1095-C. Large employers are required to submit a copy of all of the Forms 1095-C issued to all of their full-time employees along with Forms 1094-C. The Form 1094-C is a type of summary sheet for the individual Form 1095-C. The 1094-C also requires some additional information disclosures regarding total number of employees, the full-time employee count and various eligibility information. These forms need to be submitted to the IRS by Feb. 28, 2016, or March 31, 2016, if filed electronically.
To be able to fill out the Forms 1095-C and 1094-C in a timely and efficient manner, large employers need to start tracking their full-time employee and insurance information for 2016 now.