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ACA Information Center for Applicable Large Employers (ALEs)

Summary

Two provisions of the Affordable Care Act apply only to applicable large employers (ALEs): the employer shared responsibility provision and the employer information reporting provision for offers of minimum essential coverage. In addition, self-insured ALEs – that is, employers who sponsor self-insured group health plans – have additional provider information reporting requirements.

Employers must determine their ALE status each calendar year based on the average size of your workforce during the prior year. Employers that had at least 50 full-time employees, including full-time equivalent employees, on average last year, are most likely an ALE for the current year.  

What’s Trending for ALEs

IRS Extends Due Date for Employers and Providers to Issue Health Coverage Forms to Individuals

On November 18, 2016, the IRS extended the 2017 due date for providing 2016 health coverage information forms to individuals. Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2017 to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of January 31. 

Notice 2016-70, also extends transition relief from certain penalties (IRC Sections 6721 and 6722) to providers and employers that can show that they have made good-faith efforts to comply with the information-reporting requirements for 2016 for incorrect or incomplete information reported on the return or statement.  This Notice also provides guidance to individuals who, as a result of these extensions, might not receive a Form 1095-B or Form 1095-C by the time they file their 2016 tax returns.is also abating penalties for inadvertent errors and omissions where there was a good-faith effort to comply with the reporting requirements. 

The due dates for filing 2016 information returns with the IRS remain unchanged for 2017. The 2017 due dates are February 28 for paper filers and March 31 for electronic filers.

Due to these extensions, individuals may not receive Forms 1095-B or 1095-C by the time they are ready to file their 2016 individual income tax return. While information on these forms may assist in preparing a return, the forms are not required to file. Taxpayers can prepare and file their returns using other information about their health insurance and do not have to wait for Forms 1095-B or 1095-C to file.

ACA Software Testing Opens Nov. 7

The ACA Assurance Testing System opens November 7 for tax year 2016 testing. AATS is a process to test software and electronic transmissions prior to accepting software developers, transmitters, and issuers into the AIR program. Software developers – including employers and issuers – who passed AATS for tax year 2015 will not have to retest for tax year 2016; their tax year software packages will be moved into production status. New participants need to comply with test requirements for tax year 2016.

Videos Available for Employers, Providers, Transmitters

Webinars for employers and coverage providers are still available to watch in the IRS Video Portal.  The PowerPoint presentations are also available to download.

Employer Shared Responsibility Provision Estimator Available

The Employer Shared Responsibility Provision Estimator helps employers understand how the provision works and learn how the provision may apply to them.

 

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How to Determine if you are an ALE 

 

If an employer has at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is an ALE for the current calendar year. However, an employee will not be counted toward the 50-employee threshold for a month in which the employee has medical care through the military, including Tricare or Veterans’ coverage. For more details see this page.

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Resources for Applicable Large Employers 

 

ACA Tax Provisions for Employers - See the Tax Provisions for Employers on the Tax Provisions page

Questions and Answers

Forms and Publications

YouTube Videos

  • Health Care Law: Are You an Applicable Large Employer? English
  • Health Care Law: Employer Shared Responsibility Payments English | Spanish
  • Health Care Law: Information Reporting for Employers English
  • Health Care Law: Information Reporting for Self-Insured Employers English | ASL

Podcasts

  • Health Care Law: Are You an Applicable Large Employer? English

ACA Information Reporting (AIR) Program

ALEs that file 250 or more information returns must file the returns electronically. For information on the communication procedures, transmission formats, business rules and validation procedures for returns transmitted electronically through the ACA Information Reports (AIR) system, review Publication 5165.

Outreach Materials 

 

Drop-in Articles

Employers, tax preparation firms, and other organizations are encouraged to post the drop-in articles on their websites and use them in other communication vehicles.

Electronic Publications for Employers

  • Reporting Responsibilities for Health Coverage Providers (Publication 5215) English
  • Are you an applicable large employer? (Publication 5208) English
  • What employers need to know (Publication 5200) English
  • Understanding employer reporting requirements of the health care law (Publication 5196) English
  • Guide for Electronically Filing Affordable Care Act (ACA) Information Returns For Software Developers and Transmitters (Processing Year 2015) (Publication 5165) English

Webinars for Employers

Health Care Tax Tips – See our tax tips page for individuals and employers

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Page Last Reviewed or Updated: 22-Nov-2016