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Many ‘Small’ Businesses Not Exempt from Imminent ACA Reporting Deadline

Does your company need to report health care coverage as part of its business tax return process? Depending on your size, yes. The IRS requires all applicable large employers (ALE’s) to file health coverage information returns each year and the due dates are almost here.

By the way, don’t assume an ALE is a big, multi-national corporation. An ALE employs 50 or more full-time—or full-time equivalent (FTE)—employees.  Any staff member who works 30 or more hours in a week is considered full-time.

In addition, ALE’s must provide all employees who worked full time for at least one month of the year with a statement about the health insurance it did or did not offer. No ALE’s are exempt from this obligation—whether you’re governmental, tribal, non-profit, or for-profit.

To determine your number of FTE staff, add the monthly hours of everyone who works FEWER than 30 hours a week. Then, divide those total hours by 120. (Remember: employees working 120 hours per month or more are considered full time, so don’t include them in this calculation.)

Confused? Here’s an example:

  • Employee A works 15 hours per week (=60 hours per month)
  • Employee B works 10 hours per week (=40 hours per month)
  • Employee C works 20 hours per week (=80 hours per month)

Total the hours per month (60+40+80 = 180) and divide by 120 (180/120 = 1.5). Employees A, B and C equal 1.5 FTE staff. Add this number to your actual full-time staff to conclude whether you employ 50 or more.

If you determine you are an ALE, what forms do you need?

  • Form 1094-C is used to report summary information to the IRS and must accompany the Forms 1095-C.
  • Form 1095-C has two purposes:
    • To report required information to your employees, and
    • To report information about each employee to the IRS.

Officially, you must provide Form 1095-C to your staff by February 1; due to public pressure though, the 2016 deadline has been pushed back to March 31.  (Your employees would appreciate not having to wait to file their taxes though, so you may want to distribute the forms prior to then if you can.) The 2016 copies are now due to the IRS (with Form 1094-C) by May 31 (typically February 28 or February 29 in a leap year) if you’re mailing them, or by June 30 (typically March 31) if you’re filing electronically.

Need help reporting your company’s health care coverage correctly this year? Contact the experienced tax accountant team at Patrick & Robinson CPAs for assistance: or (904) 396-5400.

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