Effective January 1, 2015: The Employer Mandate and Health Coverage Reporting Requirements

Two requirements of health care reform that affect employers are going into effect on January 1, 2015. First, after much debate and delay, the first phase of the Employer Mandate (or “Play or Pay” Provision) will begin. Once it is fully implemented, this provision of the Affordable Care Act will require all employers with 50 or more full time equivalent (FTE) employees to offer a certain level of health insurance coverage at an affordable rate to all full-time employees or face a possible penalty.

For 2015, only non-compliant large employers (those with 100 or more FTE employees) will face penalties. Mid-sized employers (those with 50-99 FTE employees) will have an additional year of reprieve (until 2016) so long as the organization did not (1) reduce its workforce or workers’ hours to get below the 99 employee threshold without a bona fide reason or (2) materially reduce its health care plan as it existed on February 9, 2014. Employer Mandate penalties are incurred on a monthly basis, but paid annually.

With the implementation of the Employer Mandate comes new IRS reporting requirements. Employers with 50 or more FTE employees must begin Section 6056 (Employer Mandate) reporting for the 2015 tax year. These forms will be filed with the IRS and provided to employees in early 2016. Although the actual reporting will not be performed until early 2016, some of the data included in the reporting must be classified by month. So now is the time to begin tracking this data.

The IRS Affordable Care Act forms and instructions are available here. IRS ACA Forms and Instructions Link

For more information and the impact to your organization, we encourage you to review our “Navigating the Employer Mandate” document.