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The Most Important Tax Forms for ALEs (Applicable Large Employers)

Updated for Tax Year 2015


OVERVIEW

In 2015, some parts of the Affordable Care Act specifically apply to businesses, in particular, large employers. The Employer Shared Responsibility provisions affect companies with 50 or more full-time employees or an equivalent of part-time or seasonal workers. These companies are called Applicable Large Employers, or ALEs. 2015 is considered a transition year as everyone gets used to the new normal for workplace health plans.


Reporting Requirements

Employers will use 2015 to establish a baseline for reporting workplace health insurance coverage that it offers to its workers. The most important forms used to connect worker, employer and the government are Forms 1094-C and 1095-C. These forms report health care coverage offered to employees as well as enrollment information for those that have opted into their company’s health insurance program.

Form 1095-C

With 2015 as the start year for employers to report on workplace coverage, the first forms 1094-C and 1095-C are not due until early 2016. Form 1095-C is the workhorse form for health insurance. All employees eligible for health care in a company should receive a 1095-C. It doesn’t matter if a worker doesn’t participate in the plan, since the form shows the worker what choices are available through the company’s plan. The worker can then look at other health insurance options, using the 1095-C to compare details such as:

• general and specific points of coverage available
• the cost of each health care option
• what part of the year coverage is available through each plan

The IRS also receives a copy of the 1095-C, along with Form 1094-C.

Form 1094-C

Each 1095-C covers an individual worker and is submitted to both the worker and the IRS. The 1094-C goes only to the IRS and it summarizes all of the 1095-C forms issued to eligible workers. The 1094-C acts as a "cover-sheet" for all if the 1095-C forms going to the IRS with information such as:

• number of 1095-C forms included in the company’s submission
• number of employees in the company
• information about the company such as address, contact information, employer identification number and the name of the contact person in the company

The two forms combine to give the IRS the information it needs to administer the terms of the Affordable Care Act. The forms help the IRS determine:

• which companies comply with ACA requirements
• what health care options are available to individuals and whether they qualify for financial assistance

Special Situations

Employers that offer health plans but have fewer than 50 full-time or full-time equivalent employees are still required to report using forms 1094-C and 1095-C, starting with the 2015 tax year. While reporting for the 2014 tax year is not required, it is encouraged by the IRS.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


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