Starting in 2014, all individuals and their dependents had to be covered by health insurance, or be subject to a shared responsibility penalty. Starting in 2015, all employers who have over 50 full-time or full-time equivalent employees must offer all their full-time employees and their dependents “Minimal Essential Coverage” (MEC) with a minimum value and keep the employee contributions affordable. As a result, these employers, plus smaller employers that provide health insurance to their employees must file newly instituted information returns with the IRS. The employer will have to file either a Form 1095-B (with a Form 1094-B transmittal) or a Form 1095-C (with a Form 1094-B transmittal). Both forms require the employer to list each employee that is covered (or required to be covered) by insurance, along with the name of all dependents, and whether each employee/dependent was covered in each month of the year. Form 1095-B for employers with less than 50 full-time or full-time equivalent employees, will be completed by the insurance company providing the health insurance coverage. The Form 1095 series are to be sent to the employees by January 31st, while the Form 1094 transmittal series are to be sent to the IRS by February 28th.
The result is that every person (and their dependents) filing a 2015 Form 1040 needs to have either a Form 1095-B, Form 1095-C, or a Form 1095-A (if they purchased their health insurance on the Marketplace Exchange), to verify that they had health insurance for the year.
This new law is quite complex and requires business owners to consult with their health insurance providers and their payroll providers to accumulate information. Our firm is well positioned as a valued business advisor to help you navigate through this complex web of new information reporting. If you have any questions about the new annual reporting for health insurance coverage, please contact us.