The Patient Protection and Affordable Care Act, often called the Affordable Care Act (ACA) or sometimes Obamacare, was signed into law on March 23, 2010. Though the act has faced Congressional opposition, it remains the law of the land, and compliance is still mandatory.
Reporting for Your Business
According to IRS form instructions, companies with 50+ full-time employees (including full-time equivalent employees) need to use Forms 1094-C and 1095-C to report health coverage information and employee enrollment.
- The 1095-C is used to report ACA information to the IRS and full-time employees.
- The 1095-C also helps determine if an employee qualifies for the premium tax credit.
- Self-insured ALEs use Part 3 of Form 1095-C to report covered individuals.
- Forms 1094-C and 1095-C help determine whether an Applicable Large Employer (ALE) owes a tax penalty.
Patient Protection and Affordable Care Act Penalties
The Employer Shared Responsibility Provisions under the Patient Protection and Affordable Care Act mandates that all ALEs offer qualifying coverage to full-time employees and their dependents up to age 26, excluding step and foster children. Non-compliance penalties include:
- Type A, also known as the sledgehammer penalty—for any month that an ALE does not offer minimum essential coverage to at least 95% of its full-time employees (and their dependents), the ALE will be liable if at least one full-time employee receives the premium tax credit for purchasing coverage through the Marketplace.
- Type B, also known as the tackhammer penalty—If an ALE does offer coverage to at least 95% of its full-time employees and their dependents, but at least one full-time employee receives a federal premium tax credit for marketplace coverage.
- For either type of penalty to apply to an ALE member, at least one full-time employee must receive the premium tax credit for purchasing coverage through the Marketplace.
The Patient Protection and Affordable Care Act mandates that forms must be filed with the IRS annually. Failure to file, filing late, or incomplete filing could result in significant penalties, separate from the Type A or B. Penalties are indexed for inflation each year.
How We Can Help
Many companies have told us that managing employee data and complying with the Patient Protection and Affordable Care Act was a stressful process, which led them to implement our ACA software and services.
In order to ease the burden of compliance, Passport Software provides comprehensive IRS-certified 1095-C software to simplify Affordable Care Act reporting and data-management throughout the year.
We are also IRS approved for proxy submission on your behalf. With our ACA Full-Service option, just provide a spreadsheet with employee data, and we do the rest for you throughout the year.
A Success Story
Here’s how we helped a company simplify Patient Protection and Affordable Care Act Compliance:
“We are thrilled with the decision we made to use the Passport Software for our ACA compliance. The team at Passport was quick to tackle and master the unknown and complex process to comply with the Affordable Care Act.
The software itself was easy to use and understand but we were most impressed by the customer support provided by Passport.
The staff went above and beyond their role as software developers by providing detailed instructions on filling out forms, IRS registration, electronic filing, trouble-shooting with the IRS and much, much more.
We would be lost without them and appreciate the time, effort and support they have provided along the way.” – Laura S.