Health Coverage Information Reporting Deadlines for Applicable Large Employers are Approaching

Who Must Report?

As a governmental, Tribal, tax-exempt or for-profit employer, if you are an applicable large employer you are subject to the Affordable Care Act information reporting requirements. These requirements apply to you whether or not you offered health coverage to your employees.

You are an applicable large employer for 2015 if you had 50 or more full-time employees, including full-time equivalent employees, in 2014.

What Must You Report?

If you were an applicable large employer in 2015, you must file information returns with the IRS and provide statements to each employee who was a full-time employee for at least one month of the year about health coverage you offered or to show that you did not offer health coverage.

What Forms Must Be Used To Report?

  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return: used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS.
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage: used to report required information to your employees and to report information about each employee to the IRS.

What Are The Due Dates For Reporting?

  • Forms 1095-C must be provided to your employees by February 1, 2016.
  • Forms 1094-C and 1095-C are due to the IRS by February 29, 2016, if filing on paper, or March 31, 2016, if filing electronically.

More Information

For more information, see our questions and answers about Reporting of Offers of Health Insurance Coverage by Employers on

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Electronic Filers of Affordable Care Act Information Returns must use AIR Program

Health coverage providers and applicable large employers – and those assisting them in preparation for electronically filing the 2015 health care information returns – need to understand the IRS ACA Information Return (AIR) electronic filing process.

AIR Tax Tip

AIR Webinar – 11/17/15 – 3p.m. ET

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2016 Qualified Plan Limits

They’re here—the 2016 IRS plan limitations-but they’re not new. Because the change in the cost-of-living index doesn’t trigger an adjustment, the qualified plan limits identified here do not change in 2016. See the chart below to see the 2016 limits as well as a summary of the limits over the preceding three years. Note that certain other limitations do change for 2016 (e.g. certain IRA limits), but not the qualified plan limits reported here.

Type of Limitation 2016 2015 2014 2013
Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $18,000 $18,000 $17,500 $17,500
Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) $6,000 $6,000 $5,500 $5,500
SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $2,500 $2,500
415 limit for Defined Benefit Plans $210,000 $210,000 $210,000 $205,000
415 limit for Defined Contribution Plans $53,000 $53,000 $52,000 $51,000
Annual Compensation Limit $265,000 $265,000 $260,000 $255,000
Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 $395,000 $395,000 $385,000 $380,000
Highly Compensated Employee 414(q)(1)(B) $120,000 $120,000 $115,000 $115,000
Key employee in top heavy plan (officer) $170,000 $170,000 $170,000 $165,000
SIMPLE Salary Deferral $12,500 $12,500 $12,000 $12,000
Tax Credit ESOP Maximum balance $1,070,000 $1,070,000 $1,050,000 $1,035,000
Amount for Lengthening of 5-Year ESOP Period $210,000 $210,000 $210,000 $205,000
Taxable Wage Base $118,500 $118,500 $117,000 $113,700
FICA Tax for employees and employers 7.65% 7.65% 7.65% 7.65%
Social Security Tax for employees 6.2% 6.2% 6.2% 6.2%
Social Security Tax for employers 6.2% 6.2% 6.2% 6.2%
Medicare Tax for employers and employees 1.45% 1.45% 1.45% 1.45%
Additional Medicare Tax* .9% of comp
.9% of comp > $200,000 .9% of comp > $200,000 0.9% of comp > $200,000

*For taxable years beginning after 12/31/12, an employer must withhold Additional Medicare Tax on wages or compensation paid to an employee in excess of $200,000 in a calendar year for single/head of household filing status ($250,000 for married filing jointly).


Hospital Consolidation Trends Continue Through 2015

The wave of hospital merger and acquisition activity over the past several years has continued through 2015 due to pressure on traditional hospital reimbursement, as well as concerns over navigating a post-Affordable Care Act (ACA) health care landscape focused on “value over volume” reimbursement, increased provider collaboration, quality incentives and population health management. With the increase in hospital mergers and acquisitions, hospitals are operating in a transactional environment that is being heavily scrutinized by regulatory authorities for antitrust concerns and potential fraud and abuse violations.

Click here to view the entire Alert.


A Small PACE in the Right Direction

Overview. On October 8, 2015, President Obama signed the Protecting Affordable Coverage for Employees Act (“PACE”). As originally enacted, the Affordable Care Act (“ACA”) included a provision which, beginning in 2016, would have expanded the universe of employers considered “small employers” to include those employers with 51 to 100 employees. PACE eliminates this provision and instead leaves each state with the option of defining a small employer as an employer with up to 100 employees. As a result, the existing ACA definition of “small employer”, which currently includes only groups with 50 or fewer employees, will remain in effect after 2015, except in those states that choose to expand the definition.

Staying in the large group market is significant for employers with 51-100 employees because several ACA requirements apply in the small group market that do not apply in the large group market. These small group requirements would have increased premiums and caused administrative issues for most employers with 51-100 employees. The three most significant differences between small group insured plans and large group insured plans are as follows:

  1. Small group insured plans must cover ten essential health benefits (e.g., pediatric dental care, mental health and substance use disorder services, behavioral health treatment).
  2. A small group insured plan must meet specified actuarial values, while a large group insured plan can provide any actuarial value as long as the plan meets the 60% minimum value requirement.
  3. As more fully described below, small group insured plans are subject to ACA’s national community rating rules.

Community Rating Laws. If left to their own devices, insurance companies would charge premiums based on the risks they are insuring. In the health insurance arena, for example, insurance companies would normally rate employers purchasing group health insurance coverage based on such factors as the age and health status of plan participants. The community rating laws are designed to level the premium costs for group health insurance among small employers such that small groups with healthy members will pay higher premiums than would otherwise be the case if the insurance companies were allowed to fully rate based on risk, while small groups with less healthy employees will pay correspondingly lower premiums. In other words, the community rating laws are designed to compel healthy groups to subsidize the insurance costs of unhealthy groups.

The various state departments of insurance impose widely different restrictions on insurance carriers’ ability to rate group health insurance coverage provided to small groups. New York, for example, imposes the most severe rating restrictions, while Virginia and Hawaii impose no rating restrictions at all, with the other 47 states falling somewhere in between.

Prior to 2014, there were no federal rating restrictions with respect to health insurance. This changed as a result of the enactment of ACA, which imposed national community rating restrictions on small groups of 50 or fewer effective January 1, 2014 (and, absent the enactment of PACE, would have imposed national community rating restrictions on groups of 100 or fewer effective January 1, 2016). The ACA community rating restrictions overlay rather than preempt the state law restrictions. In other words, insurance carriers are required to comply with state law community rating requirements to the extent more restrictive than the federal requirements.

Implications of PACE. The biggest winners are fully-insured healthy groups in the 51-100 category in states that choose to stick with the 50-employee definition, which likely would have seen significant health insurance premium increases effective in 2016 absent the passage of PACE.

Some states will need to consider whether to adjust their definitions of small employer for community rating purposes in light of PACE. Specifically, in anticipation of the ACA provision which would have expanded the small group definition to groups of 100 employees or fewer effective January 1, 2016, several states, including California, Colorado, Maryland, New York, Virginia and Vermont, had previously changed their definition of “small group” to encompass groups of 100 or fewer commencing January 1, 2016 to mirror what they thought would be the federal small group definition. Maryland reacted quickly to the President’s signing of PACE, issuing a bulletin on October 8 indicating that the definition of “small employer” for purposes of the Maryland community rating laws would remain at 50 employees in 2016 in light of the change in the federal law. It remains to be seen what other states will do in light of the passage of PACE.


New IRS Resource helps Employers Understand the Health Care Law

The following article can be posted on your websites and used in other communication vehicles to help employers get the facts about the new IRS web page for applicable large employers.

The new ACA Information Center for Applicable Large Employers page on features information and resources for employers of all sizes on how the health care law may affect them if they fit the definition of an applicable large employer.

The web page includes the following sections:

  • What’s Trending for ALEs,
  • How to Determine if You are an ALE,
  • Resources for Applicable Large Employers, and
  • Outreach Materials.

Visitors to the new page will find links to:

  • Detailed information about tax provisions including information reporting requirements for employers,
  • Questions and answers, and
  • Forms, instructions, publications, health care tax tips, flyers and videos.

Although the vast majority of employers will not be affected, you should determine if you are an applicable large employer.  If you averaged at least 50 full-time employees, including full-time equivalent employees, during 2014, you are most likely an ALE for 2015.  If you have fewer than 50 full-time employees, you may be considered an applicable large employer if you share a common ownership with other employers. As an applicable large employer, you should be taking steps now to prepare for the coming filing season.

In 2016, applicable large employers must file an annual information return – and provide a statement to each full-time employee – reporting whether they offered health insurance, and if so, what insurance they offered their employees.

If you will file 250 or more information returns for 2015, you must file the returns electronically through the ACA Information Reports system.  You should review draft Publication 5165, Guide for Electronically Filing Affordable Care Act (ACA) Information Returns, now for information on the communication procedures, transmission formats, business rules and validation procedures for returns that you must transmit in 2016.

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Starting and Governing a Nonprofit 501(c)(3) Organization in Missouri

When: Thursday, Oct. 22, 2015, from 9 a.m. to 5 p.m.
Where: Social Sciences and Business Building — SSB # 411 on the UM-St. Louis North Campus
Fee: $89 (includes lunch)

Program Description: 
Starting a 501(c)(3) nonprofit organization and governing a 501(c)(3) nonprofit organization are flip sides of the same coin.  Steps you take in forming a 501(c)(3) nonprofit corporation affect how your organization must operate in the future. Steps you take in the governance and operation of your 501(c)(3) nonprofit corporation affect your ability to maintain your 501(c)(3) tax-exempt status with the IRS on an ongoing basis.

Come to this class to learn how to start a Missouri nonprofit corporation that will seek to obtain 501(c)(3) tax exempt status from the IRS. In addition, this class will also cover good governance policies, strategies, and requirements that will allow your organization to maintain its 501(c)(3) tax exempt status on an ongoing basis once you are up and running.

This is an intensive 8-hour class that will focus on practical information and resources like forms to use, websites to access, governmental offices to contact or be aware of, and a checklist of steps to take.

Instructor Dan Sise, JD, joined the Nonprofit Management and Leadership Program (NPML Program) at U.M. – St. Louis in October, 2008, and serves as the NPML Program’s Academic Coordinator and Community Engagement Manager. A 1997 graduate of the University of Illinois College of Law, Dan is currently licensed to practice law in Missouri and Illinois. In the course of his legal career, Dan has dealt with a wide range of issues, including regulatory compliance, insurance coverage and defense, community redevelopment, and nonprofit governance and oversight. He serves on the board of directors of a number of nonprofit organizations, including the St. Louis-Jefferson Solid Waste Management District and Mission: St. Louis. Prior to joining the faculty of the NPML program, Dan worked at Habitat for Humanity St. Louis where he was director of operations.

To register, click here.

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The Tax Man Commeth Not to Data Breach Victims

The IRS has issued some favorable guidance on the tax treatment of identity protection services provided to data breach victims.  In Announcement 2015-22, the IRS indicated that when an organization experiences a data breach, and it provides identity protection services to individuals whose information may have been compromised, the IRS will not assert that the individual must include the value of the services in gross income.  In addition, the IRS says that when an employer provides such services as a result of a data breach involving the recordkeeping systems of the employer, or the employer’s agent or service provider, the employer will not be required to include the value of the services in the employee’s gross income and wages.  The Announcement also indicates that the IRS will not assert that these amounts need to be reported on an information return (such W-2 or 1099-Misc.).

According to the Announcement, the “identity protection services” to which this guidance applies include credit reporting and monitoring services, identity theft insurance policies, identity restoration services and other similar services, but only when provided in connection with a data breach that occurs as a result of “hacking” or otherwise.  The tax relief provided by this guidance does not apply where an employer provides these services to its employees as part of its regular compensation and benefits package.  Nor does it apply to cash received in lieu of identity protection services.  Also, although the value of an identity theft insurance policy is included in the relief, it does not apply to the proceeds received under an identity theft insurance policy.  The tax treatment of such amounts is determined under existing tax laws applicable to insurance recoveries.

The Announcement concludes with a  request for comments on whether organizations commonly provide identity protection services in situations other than as a result of a data breach and whether additional guidance would be helpful in clarifying the tax treatment of the services provided in those situations.  The deadline for providing comments to the IRS is October 13, 2015.


EO Update: e-News for Charities & Nonprofits

IRS is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities

Health Care Law Tax Provisions: IRS Recorded Webinars for Employers and Coverage Providers

  1.  IRS is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities

This is a reminder that the Internal Revenue Service is seeking applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities (ACT). Notice in the Federal Register contains more details about the ACT and the application process. Applications will be accepted through September 4, 2015.

  2.  Health Care Law Tax Provisions: IRS Recorded Webinars for Employers and Coverage Providers

Employers and health coverage providers now have access to recorded webinars from IRS about the Affordable Care Act’s employer provisions and related tax requirements. If you are a business owner, tax manager, employee benefits manager, or health coverage provider, you can access and review these videos anytime to better understand how the health care law may affect your organization. Each of the following ACA videos on the IRS Video Portal provides about 40 minutes of detailed information on the specific tax provision mentioned in the title.

Employer Shared Responsibility Provision (47 minutes)

Learn about determining applicable large employer status, payments, and transition relief for 2015.

Employer-Sponsored Health Coverage Information Reporting Requirements for Applicable Large Employers (37 minutes)

Learn about employer-sponsored health coverage information reporting requirements for applicable large employers, including:

  • who is required to report
  • what information the law requires you to report
  • how to complete the required forms

Information Reporting Requirements for Providers of Minimum Essential Coverage (35 minutes)

Learn about the information reporting requirements for providers of minimum essential coverage, including employers that provide self-insured coverage. Learn about:

  • who is required to report
  • what information the law requires you to report
  • how to complete the required forms

View the recorded webinars in the IRS Video Portal using one of the following tabs: Businesses, Tax Professionals, Governments and Non-Profits. After clicking on one of these tabs, simply select “Affordable Care Act” from the list of topics on the left side of the screen, and you will see a list of recordings about these and other ACA topics.

In addition to videos about the tax provisions of the Affordable Care Act on the IRS Video Portal, there is a wide range of videos on other tax topics for individuals, businesses and tax professionals.

For more information about the Affordable Care Act visit

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