High Rates of Federal Exchange Enrollment Underscore the Importance of Employer Compliance with Reporting Requirements
A recent article in Business Insurance reported that more than 540,000 people selected a health plan on the federal exchange (Healthcare.gov) during the first week of open enrollment. This was 81,000 more than those enrolled during first week of last year’s open enrollment. Open enrollment for 2016 runs through January 31, and the Obama administration is hoping there will be 10 million paying exchange members by the end of 2016.
Why is this important for employers?
As a reminder, the purpose of Forms 1094-C and 1095-C is to prove to the IRS that employers offered affordable coverage to their full-time employees. If a participant in the exchange received a subsidy, the IRS wants to know if that individual was eligible for affordable employer-sponsored coverage. If a subsidy was provided and the employer was responsible for offering coverage … someone must pay. Either the employer will owe a penalty (if it’s subject to the employer mandate with respect to the employee), or the employee will need to repay some or all of the subsidy.
Therefore, employers should continue carefully tracking their offers of affordable coverage to eligible employees, to allow the IRS to ensure that individuals receiving subsidies are actually entitled to them, and that employers are complying with the employer mandate.
For more information on how employers can prove offers of ACA-compliant coverage, please see Lockton Benefit Group’s new white paper from Compliance Services.