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Don’t Let Your Customer Invite The IRS Into Their Business

November 19, 2015

With the holidays approaching, chances are that you will have many guests visiting your business or home.  Some may even be uninvited guests.  While there may be little you can do to keep weird Aunt Martha or creepy Cousin Jack from you doorstep, there is something that you can do to keep the IRS away.  Your customer shouldn’t unintentionally invite the IRS into their business by not understanding and submitting the proper reports required by the Affordable Care Act.

It is easy to get confused, but in a nutshell, reporting for calendar year 2015 is due in very early 2016.  Who reports and what is reported is a bit more complicated.  Your customers should know in general that the IRS is looking for three pieces of information from either your customer’s insurance carrier, or directly from your customer, depending on the size of their company and whether it is fully-insured or self-insured.  Employers with more than 50 full-time equivalent employees are required to report the following three things:

  • Was an offer of health insurance made to full-time employees and their dependents and when was the offer made?
  • Was the health plan offered affordable?
  • Were eligible employees enrolled and for what months? 

Before we dive further into the reporting requirements, there are two things that your customer needs to know.  The first: is their company is an applicable large employer and do they have more than 50 full-time equivalent employees; and second: is the health plan that they offer fully-insured or self-insured?  

There are four general categories that reporting can be broken down into:

1. Companies with fewer than 50 full-time equivalent employees and fully-insured – If this category fits your customer’s business then they should know the following three things:

  • They are not directly responsible for reporting.
  • Their insurance carrier will file IRS Form 1094-B and 1095-B on their behalf.
  • Their carrier will also provide IRS Form 1095-B to their employees for their individual tax filing.

2. Companies with fewer than 50 full-time equivalent employees and are self-insured – if this describes your customer’s company and their health plan then they should know that they are responsible to:

  • File Form 1094-B and Form 1095-B with the IRS
  • Provide IRS Form 1095-B to their employees

3. Companies with 50 or more full-time equivalent employees and fully-insured – In this scenario, it requires a combined effort of your customer’s insurance carrier and your customer’s company to get the right forms submitted:

  • Your customer’s insurance carrier will file Form 1094-B and 1095-B with the IRS on their behalf
  • Your customer’s carrier will also provide Form 1095-B to their employees
  • Your customer’s company will file Forms 1094-C and 1095-C with the IRS
  • Your customer’s company will also provide IRS Form 1095-C to their employees

4. Companies with 50 or more full-time equivalent employees and are self-insured:

  • Your customer’s company files Form 1094-B and 1095-C with the IRS
  • Your customer’s company provides their employees with IRS Form 1095-C

We know this can be confusing and that is why SBAM has two resources that can help you and your customers sort this out and get the proper IRS forms completed and filed.

ERISA and ACA Consulting

If you and your customer need assistance with knowing whether their company is an applicable large employers our partner, Kushner & Company, will help them make that determination and keep them informed on the required reports under the Affordable Care Act.  There are also many other ERISA reports that are required and information on those is provided by Kushner & Company as well.  Please click here for information about our ERISA and ACA consulting help.  

ACA Tracking & Reporting

If you and your customer need assistance completing the IRS From 1094-C and 1095-C forms and getting them submitted to the IRS, our partner, Benepay Technologies, will determine your customer’s employees’ monthly status, calculate the ACA codes, and process and send these forms so they stay compliant. Please click here for information about our ACA Reporting help.

We understand this ERISA and ACA compliance process is complicated and confusing.  SBAM is here to help.  If you have questions please give us a call at (800) 362-5461. 

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