The Internal Revenue Service (IRS) issued Publication 5223 General Rules and Specifications for Affordable Care Act Substitute Forms 1095-A, 1094-B, 1095-B, 1094-C, and 1095-C that describes how employers may prepare substitute forms to furnish ACA reporting information to individuals and the IRS.

One thing rings true when it comes to the Affordable Care Act (ACA): “expect the unexpected.” I know this sounds cliché, but it was my best attempt to describe the experience HR professionals encounter as they attempt to comply with this somewhat murky piece of legislation. Last year on December 28, we were alerted a month from the approaching deadline that the forms and filing requirements had moved two and three months out to address challenges. This was a fairly drastic move within a month of a significant compliance deadline.

The long-standing IRS FAQs related to reporting under sections 6055 and 6056 on requirements provided by the Patient Protection and Affordable Care Act (ACA) have been updated to reflect new information. Final instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in September 2015, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C. On December 28, 2015, in Notice 2016-04, the IRS extended the information reporting due dates for insurers, self-insuring employers, other health coverage providers and applicable large employers. The updated FAQs take the information from Notice 2016-04 into account.

Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance while applicable large employers (ALEs) are required to offer health benefits to their full-time employees. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Reporting will first be due early in 2016, based on coverage in 2015. All reporting will be for the calendar year, even for non-calendar year plans. Mid-size employers (those with 50 to 99 employees) will report in 2016, despite being in a period of transition relief in regard to having to offer coverage. The reporting requirements are in Sections 6055 and 6056 of the ACA. Draft instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in August 2015.

The Patient Protection and Affordable Care Act (PPACA) provides that individuals who do not have minimum essential (basic medical) coverage will owe a penalty unless they qualify for an exemption. Employers with 50 or more employees that do not offer affordable, minimum value coverage to their full-time employees also will owe a penalty. In addition, individuals who have lower incomes and meet other requirements may be eligible for advance tax credits to help pay for health coverage if they purchase coverage through a Marketplace. The Internal Revenue Service (IRS) is generally responsible for verifying that individuals have the required minimum essential coverage, individuals who request premium tax credits are entitled to them, and large employers are meeting their shared responsibility (play or pay) obligations. The IRS will be using IRS Forms 1094 and 1095 to gather the information it needs to administer penalties on those who owe them and to verify that tax credits are accurate.