The Affordable Care Act or, more fully, The Patient Protection and Affordable care Act (PPACA) a.k.a. Obamacare was signed into law by President Barack H. Obama on March 23, 2010. The ACA improves access to and affordability of Health Insurance for all citizens or legal residents of the United States of America. The law requires that insurance companies provide a minimum standard of coverage without regard to gender or pre-existing medical conditions excluding smoking.
Individuals that are not covered by an employer-sponsored health plan, Medicaid, Medicare (if over 65 years of age or disabled and less than 65 including those requiring end-stage Dialysis or with ALS) or other insurance program are required to purchase private insurance approved by the IRS. Failure to do so will result in a penalty.
Some exemptions do exist for financial hardship or on the basis of religious belief but must be approved by the IRS.
Individuals and businesses across the US can use Health Insurance Exchanges to shop for insurance coverage.
Open enrolment on Exchanges began October 1, 2013. For 2015, enrolment is slated from November 15, 2014 to February 15, 2015. If an individual’s or their family’s income is between 100% and 400% of the federal poverty level then they will receive sliding scale federal subsidies, as a refundable tax credit, for purchases made through an Exchange.
For Applicable Large Employers (ALEs) or all businesses employing 50 or more full-time employees or full-time equivalents (FTEs), the mandate is that they must offer employer-sponsored health plans or pay a tax penalty if the government has to subsidize the employee’s health care through tax deductions. This provision is effective for the 2015 tax year for companies with 100 or more full-time employees. ALEs are required to submit, to the IRS, at least 1 Form 1094-C (Transmittal of Employer-provided Health Insurance Offer and Coverage Information Returns) and 1 Form 1095-C for each full-time employee. Form 1095-C must also be provided to each employee by January 31st of the year immediately following the applicable tax year. That is, by Jan.31, 2016 for the 2015 tax year. Filing may be done either on paper or electronically. However, if there are 250 or more 1095-C forms then ALEs must submit this data electronically using the Affordable Care Act Information Returns (AIR) system.
ALEs with 100 or more full-time employees have two years to phase in compliance so that they cover 95% of their employees. ALEs with 50 to 99 full-time employees have until 2016 to start complying.
Under IRS tax code sections 6055 and 6056, employers must compile monthly and report annually numerous data points to the IRS (March 2016) and their own employees (January 2016). This data will be used to verify the individual and employer mandates under the law.
ASL’s ACA Compliance Module will remove the tracking and reporting burden on employers by automating data collection, reporting and filing including eFiling of 1094-C and 1095-C.