If you’re an applicable large employer, you may be required to file a new tax form this month. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is required for each full-time employee. The form discloses information on the group health insurance coverage you provide.
The filing requirement applies to applicable large employers (ALEs). You’re an ALE if you have a combination of 50 or more full-time employees or full-time equivalent (FTE) employees in the prior year. A full-time employee is anyone working on average 30 hours or more per week, or 130 hours per month. You’ll also need to count “full-time equivalent” employees. These are employees whose actual working hours are less than 30 per week, but whose total combined hours meet the equivalent of full-time.
Keep in mind that special situations may be subject to other rules. For example, a group of companies under common ownership may need to count employees for the entire group. New businesses and those that hire seasonal employees also have different requirements. Finally, remember that if your business offers a self-insurance program, you must file Form 1095-C regardless of the number of workers you have.
The 2015 Form 1095-C is due to your employees by March 31, 2016, and to the IRS by May 31. The IRS deadline is June 30 if you file electronically, which you must do when you issue 250 or more forms. The penalty for not filing Form 1095-C if you’re required to is $250 per form, up to $3 million per year.
You may also have another health insurance payroll reporting requirement to remember. When you have 250 or more employees, you need to report the value of health insurance coverage on Forms W-2.