2015 ACA Tax Provision Information for Employers
With tax season now upon us, individuals may have questions about their health coverage from 2014. As part of the individual shared responsibility provision of the Affordable Care Act (ACA), taxpayers will now have to report on their federal income tax returns whether or not they had full-year health coverage that qualified as minimum essential coverage in 2014.
Below is an overview for employers to help them understand the ACA's new tax provision and what it means to employees.
IMPORTANT TERMS TO KNOW
+Full-year coverage - Having minimum essential coverage for all 12 months of the year (January-December).
+Minimum essential coverage - Coverage under an eligible employer-sponsored plan (including self-insured plans), a government-sponsored program, a plan in the individual market, a grandfathered health plan, or other coverage recognized by the Department of Health & Human Services as minimum essential coverage.
+Shared responsibility payment - If a taxpayer or any other member of the tax household did not have either minimum essential coverage or an exemption for any month during the year, the taxpayer will need to make a shared responsibility payment with their tax return.
It's important for employers to know that in 2015, there are no employer reporting requirements pertaining to the individual shared responsibility provision for the 2014 tax year. However, beginning in 2016, health care plans and plan sponsors of self-insured group health plan coverage will be required to notify their members/participants that their health coverage meets minimum essential coverage requirements.
If you had Independent Health coverage in 2014, all of our plans that renewed on or after January 1, 2014 met the minimum essential coverage requirements.
If you have employees who have tax-related questions or concerns, they should consult with a tax advisor or service. If you're looking for more information about the 2015 ACA tax provisions, visit www.irs.gov. As always, employers with questions about the ACA requirements or their group coverage can contact their Independent Health account manager.