As we approach the end of 2015, there are a couple of health insurance related deadlines you may need to plan for. The biggest question is: “Do I need to provide health insurance to my employees?”, but you may also face some Affordable Care Act reporting requirements.
If you’re not providing benefits, you may need to find individual insurance before the end of the year. We’re in the “open enrollment” period for individual healthcare, which means you can sign up for individual health insurance now to avoid penalties in 2016. Here are some insurance basics to help you stay compliant.
The Basics
Q: What is the ACA and what does it mean for me as a business owner?
Effective January 1, 2016, businesses with at least 50 full-time equivalent (FTE) employees will need to start offering minimal essential coverage to full-time workers to avoid penalties. If an employer doesn’t provide coverage to a full-time employee, the employer faces a $2,000 per employee (minus the first 30 full-time employees) penalty. If employers provide coverage, but the coverage does not meet the minimum value and affordability requirements, the penalty is $3,000 per full-time employee receiving a federal subsidy.
Q: What is the penalty for my employees if they don’t have insurance?
The penalty for not carrying individual health insurance coverage rises again in 2016. The penalty for not having health insurance coverage in 2016 is $695 per adult, $347.50 per child or 2.5% of family income – whichever is greater.
Tip: Not providing benefits? We’ve partnered with Stride Health to help your team find coverage and stay compliant. They can evaluate individual health plans, find subsidies and discounts, and even find prescription discounts. Get started by visiting “insurance” in the app, or clicking here.
Q: How do I calculate FTEs to know if I need to provide coverage?
Full-time employees are defined as employees who work at least 30 hours per week or have hours that equal at least 130 hours a month for more than 120 days in a year. To determine FTE status, employers count each of their full time employees as one employee. Employers then should take the total number of hours worked by part-time employees in one week and divide that amount by 30. The result plus the number of full-time employees equals the FTE status. To learn more about calculating FTE employees, visit the healthcare.gov site.
Q: What health plans are eligible?
A health plan meets the minimum value standard if it’s designed to pay at least 60% of the total cost of medical services, and if its benefits include substantial coverage of inpatient hospital and physician services. Employer insurance is considered affordable under the health care law if the employee’s share of the premium for the lowest priced minimum value plan available that would cover the employee only — not the employee’s family — is 9.56% or less of their household income. Individuals offered coverage from their employer that provides minimum value and is considered affordable aren’t eligible for a premium tax credit.
Additional requirements for large employers
Q: What is ACA Reporting?
A: Affordable Care Act reporting is the action of filing required information to the Internal Revenue Service (IRS) and sending copies to recipients/employees.
The Affordable Care Act requires employers to file annual information with the IRS and furnish statements to employees on healthcare plan coverage information beginning in 2016 (for reporting on calendar year 2015).
Q: Who Needs to File?
A: For calendar year 2015, employers with 50 or more full-time employees and all self-insured employers regardless of size must report healthcare coverage information to employees and the IRS.
Q: What are the Filing Requirements?
A: Large employers with 50 or more full-time equivalent employees in 2015 must file Forms 1094-C and 1095-C.
Q: What is the purpose of Form 1094-C?
A: Form 1094-C must be used to report to the IRS summary information for each employer. Its purpose is the reinforcement of the employer mandate. Only 1 Form 1094-C per employer needs to be reported to the IRS.
Q: What is the purpose of Form 1095-C?
A: Form 1095-C is used to report information about each employee. Form 1095-C needs to be reported to the IRS for each full-time employee who was eligible for minimum essential coverage any time during the year.
Q: What are the important dates to remember?
A: The federal filing deadlines for Affordable Care Act reporting are consistent with W-2 & 1099 reporting. Form 1095-C, must be provided to employees by January 31 2016, similar to W-2 forms. This means that statements for 2015 must be provided no later than February 1, 2016 (because January 31, 2016 is a Sunday).
Forms must then be provided to the IRS by February 28 or March 31, 2016, if filed electronically.
Q: How can I learn more?
A: You can find the forms in our HR Resources section under “New Hire Forms”. For additional help, you can call Restaurant HR Group at at 888-506-0718 or support@restaurantHRgroup.com
Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.
