Affordable Care Act Requirements & Reporting for 2016 - Restaurant CPA

Currently, there is uncertainty as to the viability of the Affordable Care Act and some of its important mandates under the new administration, such as the “pay-or-play” mandate, ACA reporting, individual mandate penalty, insurance marketplaces/exchanges, Medicaid expansion, some market reform changes, and a multitude of taxes including the Cadillac tax plan. Any major changes and implementation of certain amendments in regards to ACA are currently being discussed and negotiated in Washington. Until further notice, prepare to comply with the ACA mandates in effect for 2017.

Affordable Care Act Requirements

The Affordable Care Act requires employers with at least 50 full-time workers to offer health insurance to their employees. When employers are identifying full-time employees, not only do they have to calculate actual working hours but they must also include any time that an employee receives employer-funded disability benefits, coverage by an employee funded disability plan, and jury duty. Employers who are required to offer their employees health insurance must send a statement, Form 1095-C, to all employees eligible for coverage.

Forms 1094-C & 1095-C

The 1095-C statement provides details about the coverage offered to the employee, the months of the year the coverage is available, and the lowest cost premium available to the employee. All employees eligible for coverage should get a 1095-C, regardless of whether they participate in their employer’s health plan. Employers must send 1095-C forms to their employees and the IRS. When employers send 1095-C’s to the IRS, they also must file the Form 1094-C. This form is essentially a cover sheet for the 1095-C forms which provides information about the employer, how many employees it has, and how many 1095-C forms are being sent.

The IRS needs information from 1095-C forms because it has a key role in enforcing the ACA. Companies that are required to offer insurance but do not, may have to pay a penalty. By collecting 1095-C forms, the IRS can track who is and isn’t making health coverage available to workers. Meanwhile, the ACA also requires most people to have health insurance, and under certain circumstances provides financial assistance to people who do not have an opportunity to get coverage through an employer. Information from the 1095-C informs the IRS who has access to employer-sponsored health insurance and who does not.

You can download Form 1094-C, here: https://www.irs.gov/pub/irs-pdf/f1094c.pdf,
and Form 1095-C, here: https://www.irs.gov/pub/irs-pdf/f1095c.pdf

For more information, please contact us.

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