Q/A: What Affordable Care Act changes does my company need to be prepared to implement in 2016?

February 19, 2016 | New year means new ACA reporting requirements

A. Most employers are facing three main changes under the ACA for 2016.

First, the employer mandate takes effect for all employers with 50 or more full- time employees (including part-time equivalents). under the employer mandate, these applicable large employers, or ALEs, must offer all full-time employees cover- age that is affordable and provides minimum value. Coverage is affordable if the employee’s cost of employee-only coverage does not exceed 9.5 percent of the employee’s household income. Coverage provides minimum value if the policy pays at least 60 percent of covered costs. Failure to offer coverage, or offering coverage that is not affordable or does not provide minimum value, could subject employers to penalties. Prior to 2016, the employer mandate applied only to ALEs with at least 100 full-time employees (including part-time equivalents).

Second, all ALEs (including those with between 50 and 100 full-time employees) must begin reporting their offers of coverage to the Internal Revenue Service and their employees this year. Initially, the deadline for these reporting requirements was set to coincide with W-2 reporting deadlines. However, in December of last year, the IRS delayed the ACA reporting requirements for 2016. ALEs must now provide Form 1095-C to employees by March 31, 2016. ALEs must file Form 1094-C with the IRS by May 31, 2016, if filing on paper, or June 30, 2016, if filing electronically. Employers filing 250 or more Form 1094-Cs must file electronically.

Third, employers that are reimbursing employees for individual policies are now subject to penalties of $100 per employee, per day. This practice violates two of the market reforms under the ACA: (1) the prohibition on annual limits and (2) the requirement to provide preventive services without cost sharing. The IRS previously issued transition relief from these penalties for certain small employers. The transition relief has now expired, and any employers offering this type of an arrangement could be subject to significant penalties.

Learn more about ACA compliance at ABI's upcoming 2016 Critical Business Updates in Sioux City and Dubuque.


Alice Helle, Attorney
BrownWinick Law Firm

Cynthia Lande, Attorney
BrownWinick Law Firm