ACA Update: How to Prepare for the New IRS Reporting Deadlines

December 30, 2015

Category: Compliance

Concerned about filing your ACA forms in time? No need! On December 28, 2015, the IRS extended this year’s deadlines.

Here are the new IRS ACA deadlines:

  • Sending completed 1095-C Forms to Employees:
    • Deadline is now March 31, 2016
  • Filing 1094-C and 1095-C Forms with the IRS:
    • Deadline is now May 31, 2016 (if not filing electronically)
    • Deadline is now June 30, 2016 (if filing electronically)

These deadline extensions mean that Applicable Large Employers (see below for more information) now have more time to prepare everything they need to comply with ACA reporting requirements. More time is great, but early filing is always encouraged – and filing the forms is only one part of complying with the ACA Employer Mandate.

How do I determine whether my company is subject to ACA requirements?

All companies that were Applicable Large Employers (ALEs) in 2014 are required to file forms 1094-C and 1095-C for benefits offered during the 2015 calendar year. An ALE is a company that had more than 50 full-time employees (including full-time equivalents).  

To figure out if your company was an ALE in 2014, simply follow the steps below:

  • Calculate number of full-time employees: Each employee with at least 130 hours of service in a month counts as a full-time employee. You need this number for each of the months in the 2014 calendar year.
  • Calculate number of full-time equivalents: Combine the number of hours of service for all non-full-time employees for the month (but do not include more than 120 hours of service per employee), and then divide the total by 120 to get the number of full-time equivalents for each month.
  • Total (full-time employees + full-time equivalents): For each month in the calendar year, add together the number of full-time employees and full-time equivalents, and round to the nearest hundredth.
  • Monthly average: Divide the above total by 12 to get the monthly average. Round down to the nearest whole number.

If the monthly average for 2014 was 50 or above, your company is considered an Applicable Large Employer and is subject to the requirements of the Employer Mandate for 2015.  Click here to view some helpful example calculations.

What kind of coverage do I need to offer to eligible employees?

For 2015, Applicable Large Employers are required to offer minimum essential coverage that is affordable and provides minimum value to at least 70% of eligible employees (this threshold will increase to 95% in 2016).

  • Minimum Essential Coverage is defined as most group health plans offered by a large or small employer, or health coverage provided by the government. A plan consisting exclusively of “excepted benefits” does not meet this threshold. Excepted benefits include certain limited-scope benefits, such as stand-alone dental or vision plans that are unbundled from medical plans.
  • Affordable Coverage means an employee’s required contribution for self-only coverage (meaning the amount to acquire coverage for only oneself, and not the cost for dependents) does not exceed 9.5% of their household income. Employers can approximate total household income by using “safe harbors” such as W2 wages, hourly pay rate, or the federal poverty line.
  • Minimum Value Coverage refers to insurance that pays on average at least 60% of the total allowed cost of benefits covered under the plan. This means that enrollees pay (via deductibles, coinsurance, copayments and other out-of-pocket amounts) on average no more than 40% of the total allowed cost of benefits.

5 Easy Steps to ACA Compliance with Zenefits ACA Automation

Zenefits makes complying with the ACA easy and painless. We’ll navigate the dense regulatory landscape and perform complex calculations for you, utilizing existing data within the Zenefits system.  Once you set up Zenefits ACA Automation, we’ll generate 1094-C and 1095-C forms, furnish them to your eligible employees, and e-file with the IRS on your behalf.

  1. Prepare and Gather Information
    Ensure that the data within Zenefits is up-to-date and complete. If you joined Zenefits mid-year, don’t have payroll synced, or didn’t use Zenefits as your system of record for the 2015 calendar year, we may not have all of the information required by the IRS. View our Preparing for the ACA checklist.
  1. Set Up Zenefits ACA Automation
    Go through the simple setup process.  In some limited instances, we may ask you to upload ACA-required reporting information if it does not exist within Zenefits.
  2. Monitor Your ACA Automation Information in Zenefits
    Review employee eligibility and offer data, make edits to data if necessary. The data in the ACA Automation Overview is what Zenefits uses to populate and generate your company’s 1094-C and 1095-C forms.
  1. Generate, Review, and Approve Forms
    Once you review and approve, Zenefits will deliver 1095-C forms to your employee’s document libraries by the March 31, 2016 deadline.
  1. E-File Forms with the IRS
    You will have the ability to take 1094-C and 1095-C forms that you have generated and e-file them with the IRS, directly from Zenefits. You will be asked to provide an electronic signature, and we’ll make sure to electronically file your forms with the IRS by the June 30, 2016 deadline.

To learn more about how Zenefits can automate your company’s ACA compliance, sign up for a demo of our free ACA Automation tool today!


Rebecca is a Benefits Advisor at Zenefits, helping clients reach their employee benefit goals for more than 20 years. She received her ACA certification through the National Association of Health Underwriters. In her free time she likes to go hiking with her two girls.

Category: Compliance

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