The final regulations by IRS were mainly designed to simplify the requirements imposed by the Affordable Care Act relating to the employer reporting. The regulations allow combined reporting for multiple requirements and a simplified reporting where the employers with considerably larger workforce provide affordable health coverage for employees.

Here are the major highlights that explain the impact of these new regulations on small and big employers.

Major Reporting Requirements:
As per ACA guidelines, two sections were added to IRC, first was Section 6055, that required health insurance carriers and employers sponsoring self-funded group health plans to report to IRS and covered employees if they are abiding by the minimum ACA requirements. This is known as ‘individual mandate reporting’ as it will help IRS to enforce the respective penalties.

The second section 6056 required employers having 50 or more full-time employees to report to IRS to assist it in enforcing Employer Pay-or-Play penalty as well as to assist full-time employees in determining their eligibility for a premium credit.

However, both the reporting systems were required to come into action by 2014, but the effective date was extended.

Are small employers also required to follow reporting requirements?
Certainly not! Employers with less than 50 full-time employees are not required to do pay-or-play reporting. Only the employers that are sponsoring self-funded group health plans need to do individual mandate reporting, while the employers that sponsor fully insured plans, the insured individual is subjected to the individual mandate reporting.

What reporting rules are to be followed by large employers?
Similar to small employers, if a large employer has a fully insured group health plan, then the insured individual will be subjected to individual mandate reporting. Large employers will be only subjected to pay-or-play reporting. Whereas, if they sponsor self-funded group health plan, then they will be responsible for both the reporting requirements. Under the IRS regulations, large employer can cater both reporting requirements on combined basis through IRS Form 1095-C, (i.e. the employee statements) along with IRS Form 1094-C which is the transmittal form. Draft version of the reporting forms will soon be released by IRS.

Reporting Deadlines:
Similar to the income tax, IRS reporting is also done annually at the end of the calendar year, though the reports include information on monthly basis. If the employer has to file statements for more than 250 employees, then the filing is done electronically with IRS by March 31 of the following year. However, if the employer has less than 250 employees, the filing can be done either by mail or electronically. The deadline for filing by mail is February 28, while that of filing electronically is March 31of the following calendar year for which reporting is done.

These are a few highlights from the IRS reporting regulations. The small and large employers are mandated to follow the reporting requirements as stated and any non-adherence to them may lead to serious actions in the form of penalties.