Few things have caused as much handwriting for employers as the new healthcare coverage reporting that was originally due to employees by February 1, 2016. Employers and advisors alike can breathe a temporary sigh of relief given the Internal Revenue Service (IRS)’s recent extension of the due date for Affordable Care Act (ACA) reporting.
IRS Notice 2016-4 provides a two-month extension for employers and insurance companies that are required to report under ACA. New form filing deadlines are as follows:
• Form 1095-B and 1095-C to employees – March 31, 2016
• Electronic transmittal of Forms 1094-B, 1094-C, 1095-B and 1095-C to the IRS – June 30, 2016
• Paper transmittal of Forms 1094-B, 1094-C, 1095-B and 1095-C to the IRS – May 31, 2016
The IRS has indicated that employees do not need to delay filing their 1040 or file an amended 1040 once forms have been received. Copies of the forms should be kept on file with other tax records if needed in the future.
For more information or to discuss the impact of this reporting relief, please contact Aronson Compensation and Benefits Practice Director Mark Flanagan at 301-231-6257.
The IRS recently released yet another notice (2015-17) related to health coverage reimbursements for small employers, including many construction contractors. Small employers in the construction industry (those with 50 or fewer employees or full-time employees in 2014) will be glad to know that this new notice actually brings some good news, as the preceding related notices generally have not.
Under the Affordable Care Act (ACA), virtually all health coverage premium arrangements that are not integrated with an employer sponsored group health plan are deemed “group health plans” on their own. Group health plans are subject to the various ACA rules and the associated penalties for non-compliance. Standalone reimbursement arrangements, by their very nature, are generally not expected to comply with the ACA requirements and will be subject to a fine of $100 per employee per day, capped at $36,500.
Often, the cost of a group health insurance plan does not make fiscal sense for small employers. In lieu of this benefit, many employers provided premium reimbursements to their employees. Employers got a deduction for such reimbursements and employees did not have to include the reimbursements as taxable wages. This worked very well for employers and employees alike for many years. Effective January 1, 2014, these arrangements basically became obsolete. Initially, there was great mystery regarding what arrangements would or would not be deemed a health plan and subject to the ACA requirements. Vendors and employers alike proposed various work-arounds only to be rebuffed by both the IRS and DOL. Further guidance also came out indicating that arrangements whereby employees included reimbursements as taxable wages would also be deemed a health plan, further restricting the use of this technique. In the end, it was determined that, effective January 1, 2014, employers could give employees additional taxable compensation to offset premium expenses but it could not be specifically linked to the payment of health insurance premiums.
Notice 2015-17 provides penalty relief for small employers who have a reimbursement plan in 2014 through June 30, 2015. For now employers can deduct premium and expense reimbursements while excluding them from employee’s taxable income up until June 30, 2015.
While the relief is minor, small employers should enjoy it while they can!
Webinar: Affordable Care Act (ACA) Compliance with Sage 300 Construction and Real Estate
With healthcare reform in full swing, accurately reporting information can be a challenge for many construction companies. Knowing where to input certain data points or calculate wages are key factors of maintaining ACA compliance. Join Aronson Consultant Jeff Gillig on Tuesday, February 24 to learn how your Sage 300 Construction and Real Estate software can make the process easier and more efficient. During this complimentary presentation, Jeff will show participants how to:
The IRS released fact sheets 2014-09 discussing the Affordable Care Act (ACA) as it pertains to individuals, and 2014-10 discussing the ACA as it pertains to employers. These fact sheets provide a helpful overview in gaining a broad understanding of essence of the ACA.
In short, all individuals, with very limited exceptions, must have insurance meeting minimum standards, and all employers with 50 or more full-time employees must offer affordable insurance. Businesses with part-time employees should be especially cautious to compute the number of full-time equivalent employees, which could very well push the business over the compliance threshold.
Due to the complexity of the ACA, professional guidance should be sought. One misstep can result in significant penalties. For further information or to discuss your specific situation, please contact your Aronson tax advisor at 301.231.6200.
One of the fundamental goals of the Affordable Care Act “ACA” is health coverage for all. With that goal comes new reporting requirements for employers and insurance companies offering health coverage. The IRS recently released drafts of the forms that will be used to report 2015 coverage information in early 2016.
Construction companies with more than 50 full-time equivalent employees will be required to use Form 1095-C to report whether or not they offered health coverage to their employees. The Form 1095-C that employees receive from their employer will include information on the months the employee was offered coverage and the employee’s share of the lowest cost monthly premium for self-only “minimum value” coverage. The employer will transmit the Form 1095-Cs, via Form 1094-C, to the IRS.
Regardless of their size, contractors that sponsor self-insured health plans and insurers are required to report on the individuals covered by their health plans. Form 1095-B will be provided to all primary insureds to show the months the primary insured and his or her family members had coverage under the plan. The plan sponsor/insurance company will transmit the forms to the IRS via Form 1094-B.
These reporting requirements are designed so that the IRS can monitor several key features of the ACA: compliance with the individual and employer mandates as well as eligibility for the premium tax credits associated with purchasing coverage through an exchange.
While these new requirements are not effective until the end of 2015, employers should begin to make sure systems and procedures will be modified in time to ensure compliance.
Please contact Mark Flanagan of Aronson’s compensation and benefits practice at 301.231.6257 to further discuss the impact of this requirement on your construction business.