Last week, we walked you through the Affordable Healthcare Act requirements for individuals to report their healthcare on their tax returns. This week, we look at the ACA tax requirements for employers.
Applicable large employers
If your company has 50 or more full-time employees, you are considered an applicable large employer (ALE) and are therefore subject to different requirements than smaller companies under the ACA. ALEs must report any healthcare coverage they provide their employees to the IRS, along with a statement of this coverage to their employees.
ALEs must submit to the IRS:
- Identification of the ALE
- Identification of all full-time employees receiving coverage
- Duration of offer
- Form 1095-C: Employer-Provided Health Insurance Offer and Coverage
- Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
Note: Even if you are an ALE who does not offer healthcare coverage, you are still required to submit Form 1095-C to the IRS.
ALEs must submit to their full-time employees:
- A copy of Form 1095-C or
- A substitute form, which must include all of the information reported on Forms 1094-C and 1095-C
For 2017 tax returns, ALEs must adhere to the following deadlines:
- January 31, 2018: provide employees with copies of Form 1095
- February 28, 2018: send IRS paper copies of Form 1095
- April 2, 2018: e-file Form 1095 with the IRS
Small employers
Small employers (with fewer than 50 employees) who do not offer health insurance have a new option this year for subsidizing their employees’ healthcare. Under the 21st Century Cures Act, employers can now use Qualified Small Employer Health Reimbursement Arrangements to reimburse employees for medical expenses. If you take part in this program, you must indicate the reimbursement amount on your employees’ W-2 forms.