Have you been keeping up with the information reporting requirements for the Affordable Care Act? You can prevent the headache at the years end by keeping this information up to date throughout the year rather than rushing to do everything at the last minute. You should also take into consideration that although the IRS extended deadlines and some relief from filing penalties last year, in all likelihood those same breaks will not apply to this year’s returns. The time to prepare for the filing season is now so that you can avoid the stress of late filing and penalties. When preparing for the filing season here are some things for you to think about.
* How many employees? When you count employees you should include both full-time employees and those who are full-time equivalent employees. You are considered an ALE (applicable large employer) if you employ an average of at least 50 full-time employees including full-time equivalent employees, on business days during the preceding calendar year. Special rules apply to related companies with a common owner, seasonal workers, and new employers.
* What is a full-time employee? An employee is considered full-time when working an average of 30 hours per week or 130 hours per month.
* What is an equivalent full time employee? To determine if an employee is a full-time equivalent, multiply the number of part-time employees by average hours worked and divide the results by the hours required for full-time status. For example: If you have 20 employees working an average of 15 hours per week this is equivalent to 10 full-time employees (20 employees times 15 hours divided by 30 hours).
* Counting employees. The general rule works like this. Add the total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each month of the prior calendar year. Divide that number by 12.
** If the answer fewer than 50, you’re not an ALE, and you generally have no reporting requirements. If the answer is 50 or more, you are an ALE.
* Necessary filing forms. If you are considered an ALE, you are required to file:
** Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, for each employee who was a full-time employee for any month of the calendar year.
** You’ll also have to file one or more Forms 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.
** Form 1095-C informs individual employees about the health coverage offered by your business.
** Form 1094-C reports the summary of all your Forms 1095-C.
* 2017 filing DEADLINES.
** Form 1095-C (copies sent to employees) ‒ January 31, 2017
** Forms 1094-C and 1095-C (copies due to IRS, if filed on paper) ‒ February 28, 2017
** Forms 1094-C and 1095-C (copies due to IRS, if filed electronically) ‒ March 31, 2017
For a more detailed analysis of your business, contact our office at 866-497-9761 to schedule an appointment with our Virtual CFO to ensure that your business in on the right financial track. Utilizing modern technology we have the capability to assist you virtually anywhere in the USA.