Employer Mandate Noncompliance Carries Stiff Penalties

An important reminder with respect to the Affordable Care Act (ACA) for 2015.

Employers with 50 or more full-time and full-time equivalent employees are generally considered to be "applicable large employers" (ALEs) under the employer shared responsibility provisions of the ACA. ALEs are subject to the employer shared responsibility provisions. However, more than 95 percent of employers are not ALEs and are not subject to these provisions because they have fewer than 50 full-time and full-time equivalent employees. Whether an employer is an ALE is determined each calendar year based on employment and hours of service data from the prior calendar year. In general, beginning January 1, 2015, ALEs with at least 100 full-time and full-time equivalent employees must offer affordable health coverage that provides minimum value to their full-time employees and their dependents or they may be subject to an employer shared responsibility payment. This payment will apply only if at least one full-time employee receives a premium tax credit through enrollment in a state based or federally facilitated Marketplace.

Also, starting in 2016 ALEs must report to the IRS information about the health care coverage, if any, they offered to their full-time employees for calendar year 2015, and must also furnish related statements to their full-time employees. The employer shared responsibility provisions will be phased in for smaller ALEs (with 50-100 full-time and full-time equivalent employees) from 2015 to 2016. Penalties are stiff for those entities that do not follow the rules in regard to the employer mandate. Be in communication with your insurance carrier to be sure you are in compliance with the law.

Reporting Requirements. All ALEs with 50 or more full-time employees and full-time equivalents are required to report for 2015. Form 1095-C is due to each full-time employee by February 1, 2016. Forms 1094-C and 1095-C are due to the IRS by February 29, 2016. Your insurance carrier should be able to help you with the information you need to report.