Worried about getting your IRS group benefits reporting done correctly? You’re not alone. Ask any employer to list the top employment headaches, and compliance with the Affordable Care Act (ACA) will probably be high on the list. And just when you get 2015 reporting requirements mastered, there will be a few more to figure out in 2016!
To make it easier for your team to ace IRS benefits reporting, here’s a quick refresher:
- Internal Revenue Code Section 6055 is focused on the Individual Mandate and verifying individuals have MEC (minimum essential coverage) so they can avoid paying the individual penalty.
- Internal Revenue Code Section 6056 is focused on the Employer Mandate, confirms eligibility for subsidies for individuals that get coverage through the Exchange, and verifies employers are meeting the Employer Shared Responsibility Mandate.
Of course, what would new reporting requirements be without new IRS forms to fill out? Employers will be required to file either Forms 1094-B and 1095-B or Forms 1094-C and 1095-C with the IRS, and also provide them to employees. Here’s a rundown on who files what:
- Plan Sponsor / Employer with less than 50 FTEs: Forms 1094-B and 1095-B (self-insured plans only)
- Plan Sponsor / Employer with 50 or more FTEs: Form 1094-C and Form 1095-C (self-insured and fully insured plans)
- Carrier / Health Insurer: Forms 1094-B and 1095-B (fully insured plan)
- Marketplace / Exchange: Forms 1094-A and 1095-A (fully insured plan)
When are these forms due?
Form 1094 to the IRS (if filing 250+ returns, you must file electronically):
- Paper forms due February 29, 2016
- Electronic forms due March 31, 2016
Form 1095 to employees:
- Due February 1, 2016 (same as W-2s) on paper, or electronically if you have individual electronic consent
Free Reporting Guide:
Download BeaconPath’s 2016 Employer Reporting Requirements for complete instructions. This free reference manual is an invaluable guide for employers.
Data: The one constant
Needless to say, all of those forms and reporting requirements require lots of data. And where does all of that information come from? From multiple sources such as HRIS, Payroll, Time Management, Leave of Absence records, and Benefits Administration records. Collecting, tracking, analyzing, and integrating all of that data can be frustrating and time consuming – and with the potential mistakes that could be made and the steep financial consequences of noncompliance, it’s crucial that you get it right:
- $250 per incorrect statement or statement not filed ($500 per employee for the IRS return and employee statement)
- $3 million maximum penalty
Bottom line: you should be asking yourself some questions right now…
Do all of your systems work together? Will you have to pull information from multiple systems? Do you have a system that will populate the IRS Forms? Who’s in charge of completing the forms and making sure they’re filed properly?
With the new reporting requirements and the stiff penalties for noncompliance, these are questions that need to be answered – and you need an efficient system in place for managing all of that information and minimizing your compliance risks.
The automated solution
BeaconPath has SuiteHR, our workforce management suite that combines HR, payroll and time and labor. With one business system completely integrated we can help you simplify your systems, manage information more efficiently, and avoid the financial sting of ACA noncompliance. Contact us to learn more.
P.S. Don’t forget to download BeaconPath’s 2016 Employer Reporting Requirements for complete IRS benefit reporting instructions.