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Get ready for the new Affordable Care Act requirements; they’re just around the corner

Are you an applicable large employer? If so, in January you may be required to file a tax form you might be unfamiliar with. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is required for each full-time employee and will disclose information on the group health insurance coverage you provide. While the rule applies only to applicable large employers (ALEs), the use of the term “large” is a misnomer. An ALE is any employer with 50 or more full-time employees, including full-time equivalent (FTE) employees, in the prior year.

Let’s break it down.

A full-time employee is anyone working on average 30 hours or more per week, or 130 hours per month. The calculation for FTE employees is a bit harder. Add up the monthly hours of everyone not full-time (capped at 120 hours for any one employee) and divide by 120. If this number, plus the number of full-time employees is 50 or more on average for the year, the new reporting rules apply to you. Keep in mind this calculation is only used to determine whether you have to file Form 1095-C. You are not required to provide health insurance to your part-time employees.

Special situations. Special rules.

If your business is part of a controlled group — that is, a group of companies under common ownership — you may have to combine the employee rosters of each company to determine whether the rules apply. If your business offers a self-insurance program, you must file Form 1095-C regardless of the number of workers you hire.

Is your company new? You’re automatically considered an ALE in your first year if you expect to meet the 50-employee requirement and actually end up doing so. To provide relief, you do not need to include seasonal workers in the count as long as the number of those workers exceeded 50 for only 120 days or fewer during the year. Also, for 2015 only, you can use any consecutive six-month period during 2014 to determine your employee count rather than average the entire year.

The 2015 Form 1095-C is due to employees by February 1, 2016, and to the IRS by February 29. The IRS deadline is moved to March 31 if you file electronically. (You must file electronically when you issue 250 or more forms.) The penalty for not filing is $250 per form, up to $3 million per year.

Be aware that these new rules are in addition to the previous requirement of reporting the value of health insurance coverage on an employee’s W-2 if you have 250 or more employees. For more details, please call our office.

Accounting Firm | New Jersey CPA - DiGabriele, McNulty, Campanella & Co is a New Jersey CPA Firm focused on providing forensic accounting, forensic investigation and damage calculations for litigation and other purposes. Also offer traditional tax, accounting and audit services to companies across the Tri-state region.

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