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Affordable Care Act (ACA): What is Required?

It’s that time of year to start thinking about gathering all the information for year-end tax forms. For the second year for many companies, this will include issuing Form 1095’s to all full time employees and a Form 1094 informational return for their business. These forms will apply to all employers who have 50 or more full time or full time equivalent employees. To be considered a full time employee the individual must work 30 hours per week or 130 hours per month.

These forms are due to employees by January 31, 2017. With that tight deadline, it is time to begin thinking about and gathering all the data you will need to properly fill out these forms. One of the first things to look at is whether an employee is considered to be full time, part time or seasonal under the Affordable Care Act standards (ACA). If they are deemed part time or seasonal, a form does not need to be issued to them.

For full-time employees, the next thing to look at is whether you offered them health insurance coverage and if so, when did it begin? What was the lowest monthly premium cost offered to that individual for coverage on just the employee? Did they accept the coverage and become enrolled in your health insurance plan or did they waive their right to health insurance coverage?

These are the basic items needed to fill out the 1095’s for your employees. There are a variety of other factors and tests that can be utilized to help determine an employee’s full time equivalent status. With penalties up to $260 per employee for failure to file or incorrectly filed form with a maximum penalty of $3,192,000, it is imperative these are filed timely and accurately. To assist in this new and complex reporting system, Ketel Thorstenson, LLP will once again be offering preparation services of Form 1094 and Form 1095. If you are interested in learning more or have any questions, please contact a member of the Ketel Thorstenson ACA Team today.


Becca Ellis

Becca Ellis

Becca joined the tax department as an associate in 2015. She is a graduate of Black Hills State University with a Bachelors Degree in Professional Accountancy. She is originally from Rock Rapids, IA.
Becca Ellis

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