The following is an excerpt from "Employer Reporting: The Perfect Storm," an eBook from The Plexus Groupe exploring the Affordable Care Act IRS compliance challenges faced by employers. To download the eBook, click here to be redirected to the Plexus Groupe's home page, where you can fill out our quick, simple eForm to be sent a PDF of the book. Beginning in tax year 2015, employers with 50 or more full-time employees must complete IRS Forms 1094 and 1095 to prove their ACA compliance. In this excerpt, ERISA attorney Jared Pope highlights why IRS Form 1095-C -- which must be completed for every full-time worker -- can be so complicated:
IN TIMES of uncertainty, employers must look directly at the responsibility and liability burden in terms of reporting, then partner with a subject matter expert to help navigate the road ahead. Companies that find success through these challenges choose someone who understands their vision and knows not only what to ask, but also what not to ask to avoid government confrontation.
And this is no small task. Keeping on the good side of the government (e.g., no audit) can even challenge those familiar with the debilitating detail these reports entail, and it’s something that must be accomplished on a monthly and yearly basis.
To give you an example of the complexity of these codes and how these descriptions can easily cause confusion, line 14 of the 1095-C form requires that you report one of the following codes about your employee health coverage:
1A. MEC/WV offered to Full-Time that is affordable using FPL safe harbor and MEC offered to spouse and dependents
1B. MEC/MV offered to EE only
1C. MEC/MV offered to EE and MEC to spouse but NOT dependents
1E. MEC/MV offered to EE and MEC to spouse and dependents
1F. MEC without MV offered to employee or employee plus any combination of spouses and dependents
1G: Self-Funded Only: offer coverage to EE who was not FT for any month and who enrolled in coverage for 1 or more months
1H: No offer of MEC
1I: Qualifying Offer of Transitional Relief: EE (and spouse or dependent) receive no offer of coverage OR an offer that is not qualifying offer OR qualifying offer for less than 12 months.
(Line) 16 takes this complexity even further. It’s hard to comprehend that reporting on an average dependent can require you to record up to hundreds (even thousands) of data points – and that’s just one person!
The Plexus Groupe is providing filing, consulting and preparation services for IRS Forms 1094 and 1095. Contact us at 847.307.6100 (Deer Park / Chicago, Illinois), 972-770-5010 (Dallas, Texas) or 405-241-9462 (Oklahoma City, Oklahoma) to speak to a Plexus professional, or contact us via the Web.