ACA Tax Forms | Employer Requirements, Deadlines, & More
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What You Need to Know About ACA Tax Forms

The Internal Revenue Service (IRS) announced changes for the 2015 tax filing season. Small business owners with employees have new reporting procedures under the Affordable Care Act (ACA).

The IRS added new ACA tax forms to this year’s filing requirements. Form 1095 will be used to report on employee health coverage. If you offer health insurance at your small business, you may need to file Form 1095. The number of employees you have and the coverage you offer determine if you file Form 1095.

In late December of 2015, news broke that there would be ACA deadline extensions for IRS forms that could apply to your small business.

The ACA sets employer standards for offering employees health insurance. First, let’s look at how your business fits into the ACA.

The Affordable Care Act

The ACA determines your employer size based on how many employees work for you. The ACA considers you a small employer if you have 50 or fewer full-time employees. You are not required to offer health coverage to employees, but you can choose to do so.

Small employers can buy coverage:

The ACA considers you a large employer if you have more than 50 full-time employees. Large employers must provide employees with affordable health insurance. Large employers must also report coverage information to the IRS.

Who fills out Form 1095?

The provider of the health coverage fills out the ACA tax forms. This means the person or entity paying for the coverage files Form 1095. If you are a small employer with a self-insured plan, you will fill out Form 1095. You file the form because you pay all your employees’ medical bills, not just a premium.

You will see three variations of Form 1095 (A, B, or C). These letters represent who fills out the form.

  • Form 1095-A is filed by health insurance providers.
  • Form 1095-B is filed by self-insured small employers.
  • Form 1095-C is filed by large employers.

You do not need to fill out Form 1095 if you are a small employer who offers fully-insured plans. With fully-insured plans, you pay the insurance company a premium. The health insurance company then pays employee health care claims. The insurance company will file Form 1095-A. Your covered employees and the IRS should receive Form 1095 from the insurance provider.

You also do not fill out Form 1095 if you have coverage through the SHOP Marketplace. The insurance provider within the SHOP Marketplace pays your employee health care claims. The insurance provider fills out and sends Form 1095-A.

As a small employer, you must file Form 1095 if you provide self-insured coverage. This means you operate under your own health care plan. You pay each employee’s medical bills, not just a premium. You will fill out and send Form 1095-B to covered employees and the IRS.

All large employers must file Form 1095-C. Large employers will file the form for every full-time employee.

Employer requirements for ACA tax forms

Form 1094 gives a summary of Form 1095. Form 1094 provides information about your plan and coverage options. It does not give information about each employee individually. Small employers with self-insured plans will use Form 1094-B as a transmittal form.

You are responsible for filling out and sending Form 1095. You must provide every covered employee with the form. You must also provide the IRS with Form 1095 for each covered employee.

To fill out Form 1095, you need this information from every covered employee:

  • full name
  • mailing address
  • date of birth
  • tax ID number (usually Social Security number)
  • the health care plan
  • months covered by the plan

The IRS made other tax filing changes for large employers. Small employers do not have to worry about changes to large employer filing procedures.

Deadlines

You must meet Form 1095 deadlines. Late forms may result in penalties from the IRS.

You must mail Form 1095 to your employees by March 31, 2016 (deadline extended from original date of February 1st).

To return Form 1095 to the IRS, you can either mail a paper format or electronically file:

  • Mail paper format forms by May 31, 2016 (originally due February 29th).
  • Electronically file forms by June 30, 2016 (originally due March 31st).

Why Form 1095 matters to small employers

You must return Form 1095 if you provide self-insured coverage to your employees. If you file an incorrect or late form, you could receive penalties from the IRS.

The IRS raised reporting penalties for the 2015 filing season. For example, the penalty for filing incorrect returns is now $250 per return (up from $100). These penalties can reach up to $3 million (up from $1.5 million).

The IRS may not penalize you for incorrect forms if you prove you have made good faith efforts to comply with reporting rules in 2015. This means you have to convince the IRS that you did not purposely return an incorrect form. ACA tax forms returned late do not meet the good-faith requirements.

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Due dates updated on December 31, 2015, per IRS announcement.

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