IRS Reporting Requirements
Under the Affordable Care Act (ACA), Applicable Large Employers (ALEs) with 50 or more full-time, including full-time equivalent employees, are subject to the employer shared responsibility provision and related IRS reporting requirements. This includes filing Forms 1094-C and 1095-C with the IRS, and sending the Form 1095-C to their employees, to report information about the health insurance coverage offered under their employer-sponsored plans for the 2016 tax year annual reporting. So, as a large employer, you’ve likely made it through your first year of annual health care reporting and are starting the process all over again. Since this is only the second year your full-time employees will receive a Form 1095-C, a communications plan is key to your success. At a recent ADP webinar, when asked if they felt their company was ready to issue Forms 1095-C to their employees by January 31, 2017, only 7-9% of respondents felt they were extremely prepared. While recently the IRS extended the ACA reporting due date for furnishing individuals the 2016 Form 1095-C from January 31, 2017 to March 2, 2017, you still need to be prepared with a solid communications plan. Without one in place, your employees may ask questions like:
– “What is this form I received in the mail, and what do I need to do with it?”
– “My accountant says I need information from another form to file my taxes this year, why?”
– “When can I expect this form?”
– “I didn’t receive my form, how can I get another copy?”
Stay Ahead of It – Getting Started in 3 Steps
It’s critical that you communicate exactly what Form 1095-C is to your employees to drive understanding and minimize possible noise (i.e., questions, calls, form reruns, etc.). You need to ensure that you’re engaging your employees by providing communications with clear and concise messages to help them understand what the form is and what they need to do with it.
Step 1: Determine Timing.
Decide when you want to communicate to your employees about Form 1095-C and how best to deliver the message. Think about how your employees like to receive information (i.e., company intranet, newsletter, manager meetings, posters, video, etc.) and determine how you will tap into those channels. Tell them several times in multiple ways. Remember to mix up how you deliver the message and that a message needs to be delivered multiple times before employees pay attention to it, understand it, and take action on it. Considering that employees will receive the forms in late January, you may want to start your education efforts in the fall. A good schedule of communications might look like this:
– Phase 1: Include a high-level article in your employee newsletter, include it in benefits
Open Enrollment materials or intranet/company portal about Form 1095-C explaining
what it is and what they need to do with it.
– Phase 2 (early): Send an email to all employees as part of Year End notifications (i.e., W-
2 timing, reminders to update their mailing addresses, Form 1095-C facts) with a link to
a video or more information about the form.
– Phase 2 (late): Mail a postcard to employees’ homes; hang posters in break rooms and
throughout offices, place table tents in cafeterias and break rooms.
– Phase 3: Send a reminder email to employees to be on the lookout for the forms in the
– Phase 3 (early): Send another reminder email to employees letting them know that they
should have their forms in hand, as well as instructions on who to contact if they did not
receive their form.
Step 2: Craft the Messages.
Keep it simple, straightforward, and relevant. If you plan to communicate to everyone who was offered coverage (retirees, former employees, or family members) you may need to change up the message and delivery channel. Consider how you will educate your internal team so they can help inform your employees. Build all of your communications from key messages like this:
– Be on the Lookout for Your Form 1095-C
– On or about March 2, you will receive the new Form 1095-C from ADP on behalf of [insert organization name]. The tax form reports whether your employer offered you minimum levels of affordable health care in compliance with ACA regulations.
– What this Means for You
– The Form 1095-C will arrive in your mailbox on or about March 2, 2017. It contains information you may need to report as part of your income tax submission for the 2016 tax year.
Step 3: Tap into the Experts.
Whether your experts are at ADP or they are in-house, having a clear communications plan is critical. If you are an existing ADP Health Compliance client, you have access to a series of pre-written, pre-designed communications tools that you can use to augment or serve as your communications plan. Contact your representative for access to the tools. If your experts are in-house, consider developing your communications plan around assets similar to those below:
– Posters: For use at your offices
– Postcard: Mail to your employees’ homes or print and hand out in the office
– Email Campaign: Create a series of emails to 1) explain what a 1095-C is, 2) when
employees can expect it and 3) remind them to look for it in their mailbox
– Table Tent: Use in cafeterias, break rooms
– Fact Sheet: Share with employees, give to managers, email or print
Additional Information Additional information about the Form 1095-C can be found here
(http://www.adp.com/contact-us/support- for-client- administrators/form-1095c- guide-for-employers.aspx) for employers and here (http://www.adp.com/contact-us/support- for-employees/form-1095c- guide-for- employees.aspx) for employees.
ACA compliance requirements can be found at www.hhs.gov/healthcare/rights/ or www.irs.gov