IRS updates FAQs on ACA information reporting by employers
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Tuesday, April 23, 2019

IRS updates FAQs on ACA information reporting by employers

By Payroll and Entitlements Editorial Staff

The IRS has updated its Questions and Answers on Reporting of Offers of Health Insurance Coverage by Employers (Section 6056) website. The revised FAQs tweak the guidance regarding how applicable large employer (ALE) members comply with the reporting requirements. 

Background. Certain employers are required to report to the IRS information about whether they offered health coverage to their employees and if so, information about the coverage offered. This information also must be provided to employees. The FAQs address these reporting requirements. 

Who must report. The IRS explains that employers subject to the employer shared responsibility provisions, called applicable large employers or ALEs, are required to report under Code Sec. 6056. An ALE is an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. 

An ALE may be a single employer or may consist of a group of related employers (such as parent and subsidiary entities or other related/affiliated entities), called an Aggregated ALE Group. An aggregated ALE group refers to a group of employers treated as a single employer under Code Secs. 414(b), 414(c), 414(m) or 414(o).  Any employer that is an ALE or a member of an aggregated ALE group is called an ALE member. An ALE member is a member of the aggregated ALE group for a month if it is treated as a single employer with the other members of the group on any day of the calendar month.  The reporting requirements under Code Sec. 6056 apply to each ALE member separately.   

Aggregated ALE group. The revised guidance provides that each ALE member must file Forms 1094-C and 1095-C with the IRS and furnish Form 1095-C to its full-time employees, using its own EIN. This is the case even if a particular ALE member does not employ enough employees to meet the 50-full-time-employee threshold. 

Government entities, churches, and a convention or association of churches should determine whether a person or group of persons is an ALE and whether a particular entity is an ALE member in the same way they made those determinations for purposes of the employer shared responsibility provisions under Code Sec. 4980H.  (https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-reporting-of-offers-of-health-insurance-coverage-by-employers-section-6056.)

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