Situation

Troas Bible College (TBC) is a private university under Internal Revenue Code section 501(c)(3). Their Controller, Lisa, called (in something of a panic) to say that she’d been to a conference and realized that TBC was an ALE for the ACA (Affordable Care Act). She was worried about the “ginormous” amount of reporting and forms that TBC was going to have to complete and file in early 2016 for their activities in 2015. She said that she was under the impression that TBC did not have to worry about 2015 ACA reporting because of the “transition rules”. We tell her that – because TBC has 50 or more FTEs – they will have to at least file Forms 1095-C and the 1094-C “transmittal”.

Rules

From the 2015 Summer issue of the Social Security Administration/Internal Revenue Service (SSA/IRS) Reporter, Page 3:

ALEs will generally file two ACA forms that follow a procedure similar to that for filing Forms W-2 and W-3.

• Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, will function much like the Form W-2 with copies going both to the IRS and full-time employees.

• Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, will function like a Form W-3.

IRS Publication 5196, Getting Ready for Monthly Tracking, provides an overview of the data that will be required to complete the ACA reporting forms.

To complete Form 1095-C, ALEs must report the following information, for each full-time employee, broken down by month:

1. information about the offer of coverage to each employee,
2. whether the employee was enrolled in the plan,
3. the employee’s share of the lowest-cost self-only minimum value coverage, and
4. whether the affordability safe harbor or other transition relief applies.

To complete an authoritative transmittal on Form 1094-C, ALEs must report:

1. whether coverage was offered to 95% (70% for 2015) of the organization’s full-time employees,
2. the total number of Forms 1095-C that the organization issued,
3. the number of full-time employees and total number of employees by month,
4. if applicable, information about members of the aggregated ALE group, and
5. whether the organization qualifies for transition relief.

The summer issue of the Social Security Administration/Internal Revenue Service (SSA/IRS) Reporter provides a description of the required data and is available at: www.irs.gov/pub/irs-pdf/p1693.pdf

Bottom Line

As you know, the Affordable Care Act is a difficult “nest” of rules to navigate!! You should make the time to take a look at Forms 1095-C and 1094-C and the instructions thereto. Also, make sure you have a good adviser to “bounce things off of”. Hopefully, he or she can walk you through the regulations and help you ensure you’re complying with this new law.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.