Under health care reform, large employers must offer health coverage to full time employees and their dependents. Employers that do not offer proper coverage might be subject to a penalty.
The IRS has identified six important facts that employers should know about the shared responsibility provisions of the Affordable Care Act.
- Employer shared responsibility applies to applicable large employers with 50 or more full-time equivalent employees.
- Employers with fewer than 50 full-time equivalent employees are generally not subject to the rules, but the entire controlled group is considered in determining the 50 full-time employee threshold.
- Employers with fewer than 100 full-time employees in 2015 may be eligible for transitional relief and not subject to penalties for 2015.
- Employers are subject to the penalty if any employee receives a tax credit for purchasing coverage on the Exchange and the employer
- Failed to offer coverage to full-time employees and their dependents
- Offered unaffordable coverage
- Offered coverage that was not minimum value
- Employers do not report penalty payments with information returns.
- The IRS will contact employers if shared responsibility payments apply and employers will have an opportunity to respond.
The tax tips are found in HCTT-2016-32 which can be accessed by clicking here.
