2016 Changes to ACA Transitional Relief in Reporting

For 2015 employer mandate reporting under the Affordable Care Act (ACA) there were various pieces of transitional relief which changed the way in which data was reported to the IRS on forms 1094-C and 1095-C.  As we begin the 2016 ACA reporting season, it is important to understand what has changed to ensure your compliance with the reporting requirements.  This is specifically important because for 2016 the ‘Good Faith Effort’ provisions will be expiring.  This means that employers who reporting incorrectly will be penalized and fined.

Here is a quick overview of the pieces of Transitional Relief which no longer apply moving forward as of the 2016 ACA reporting season:

  • 2015 Qualifying Offer Transitional Relief
    • This changes line 22 (B) of form 1095-C
    • This also changes form 1095-C line 14 in that no longer can code 1I be used
  • 2015 MEC Coverage Transitional Relief Expired
    • During 20105 reporting, on form 1094-C an employer would indicated in part III if they offered Minimum Essential Coverage based upon a standard of this MEC coverage being offered to 70% of their full time population
    • For 2016 reporting, this standard has increased to 95%
  • 4980H Transitional Relief Still Applies in Certain Circumstances
    • For 2015 reporting the ACA reporting rules allowed for two pieces of Transitional Relief commonly referred to as ’50 to 99′ and ‘100+’ Transitional Relief.  These were indicated on line 22 of form 1094-C and then again as appropriate in section III of the form 1094-C.  Specifically they were designed to eliminate or reduce penalties for certain employers who qualify should they be subject to employer mandate penalties.
    • For the most part these are expiring for 2016 reporting.  However, for employers who maintain a non-calendar year plan, they can continue to use these pieces of Transitional Relief until the end of their 2015 plan year.

There are also a number of other various changes which are important to understand.  If you would like to go more in-depth to fully understand the reporting differences between 2015 and the proposed instructions by the IRS for 2016 ACA reporting, visit the recorded webinar section of our website.  Specifically the 2016 ACA Reporting – Planning For The Updates and New Forms by clicking here.  In this recorded session we cover the following topics:

  • New deadlines for 1095-C form distribution
  • New E-filing deadline
  • No more ‘Good Faith Effort’ clause
  • Transitional relief changes
  • New codes for line 14 of form 1095-C
  • New MEC coverage guidelines
  • How to determine if you are an applicable large employer (ALE) and need to report