The Affordable Care Act (ACA) is a monumental change to our healthcare system, and with new reporting requirements comes new questions. This fact sheet provides answers to the most frequently asked questions to help you better understand the ins and outs of the ACA.

1. FAQs about the Affordable Care Act’s (ACA) Employer Shared
Responsibility Reporting Requirements
1. What is the ACA’s employer shared responsibility
requirement?
Internal Revenue Code Section 4980H requires applicable
large employers to offer adequate and affordable health
coverage to their full-time employees, those working 30 or
more hours per week, or risk an excise tax penalty.
2. What employers are subject to the ACA’s shared
responsibility requirement?
The shared responsibility rules apply to all public and
private ‘large employers’ employing an average of at
least 50 full-time employees (FTEs), including full-time
equivalent employees (FTEEs) on business days during the
preceding calendar year. Affected large employers include
those organized as for-profit entities, nonprofit entities
including churches, as well as federal, state and local
government entities.
Applicability of the control group rules.
All employees of a controlled group of entities under
IRC Sections 414(b) or (c), or an affiliated service group
under IRC Sections 414(m) or (o), are taken into account
in determining whether the members of the controlled
group or affiliated service group together are an applicable
large employer (ALE). Each entity participating in an ALE
is known as an ALE member. It should be noted that any
penalty imposed against an ALE member of a control
group or affiliated service group are applied separately to
the individual ALE member. It should also be noted that
the term ‘employer’ includes a predecessor employer and
a successor employer.
Determining applicable status.
An employer determines if it is subject to the shared
responsibility requirement for a current year by counting
the number of its FTEs (those working 30 or more hours
per week) together with its FTEEs (those working less
than 30 hours per week; for example, two individuals each
working on average 15 hours per week equate to one
FTEE) employed during the prior calendar year.
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Step 1: For each month of the prior year, the employer
counts the:
• Number of FTEs +
• Number of FTEEs (determined by adding up the hours
worked by FTEEs for the month, not exceeding 120
hours per employee, and then dividing by 120).
Step 2: Add the resulting totals from Step 1 for each
month in the prior year and divide by 12 to obtain the prior
year average.
• If the result of this calculation is less than 50, the
employer would not be deemed to be an applicable
large employer for the current calendar year.
• If the result of this calculation is 50 or more, the
employer would be deemed an applicable large
employer for the current calendar year, unless a
seasonal worker exception applies.
3. What are the potential excise tax penalties?
There are two separate potential non-deductible excise
taxes that could be assessed:
The ‘No Coverage’ excise tax penalty (IRC §4980H(a))
applies if an employee working ≥30 hours per week
is offered no coverage, or coverage that is less than
minimum essential coverage (MEC), and if the employee
qualifies for premium assistance, i.e., the individual falls
below 400% of the federal poverty level (FPL) and is not
eligible for MEC. MEC includes most types of employer
coverage, as well as government-sponsored coverage,
such as Medicaid or Medicare, among others.
Calculating the No Coverage Excise Tax Penalty
If employer fails to offer MEC to minimum 95% (70% for
2015) of its FTEs (employees + dependents1
beginning
2015) for any calendar month and employs at least one
credit employee2
, the excise tax penalty is calculated
monthly as:
(Number of FTEs – 30 [- 80 for 2015]) X $166.67
(indexed) (~$2,000/yr)3

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The ‘Inadequate or Unaffordable’ excise tax penalty (IRC
§4980H(b)) would apply if an employer offers health
coverage to at least 95% (70% for 2015) of its FTEs and
employs at least one credit employee4
, and coverage fails
to meet minimum value standard or is unaffordable. This
penalty would also apply if the employer offers coverage
to at least 95% (70% for 2015) of its FTEs, and a credit
employee is not offered coverage.
• Coverage meets minimum value standard if it covers
minimum 60% of total allowed cost of benefits
expected to be incurred under the plan. The three
options used to determine minimum value are an IRS/
HHS minimum value calculator, designed-based safe
harbor checklists, or an actuarial certification.
• Coverage under employer-sponsored plan (based on
self-only coverage cost) is deemed affordable if the
employee’s required contribution is less than 9.5%
of employee’s household income (modified AGI) for
taxable year. The three safe harbors that can be used
to determine affordability (based on self-only coverage
cost) are Form W-2 wages (Box 1), a rate of pay
method, or an FPL standard.
Calculating the Inadequate or Unaffordable Excise Tax
Penalty
If an employer offers health coverage to at least 95%
(70% for 2015) of its FTEs and employs at least one credit
employee, and coverage fails to meet minimum value
standard or is unaffordable, then the monthly excise tax
penalty is the lesser of:
• Number of credit employees multiplied by $250
(~$3,000/yr)5
; or
• (Number of FTEs – 30 [- 80 for 2015]) X $166.67
(indexed)(~$2,000/yr)5
4. What is the IRC Section 4980H employer shared
responsibility reporting requirement?
Internal Revenue Code Section 6056 obligates an
employer subject to the employer shared responsibility
requirement to file an annual report to the IRS for
purposes of determining individuals entitled to premium
assistance, as well as determine whether an employer
subject to shared responsibility might be at risk for an
IRC §4980H(a) no-coverage tax, or an IRC §4980H(b)
inadequate or unaffordable tax. Each ALE member must
accomplish its own reporting.
5. What forms are used to satisfy the employer
shared responsibility reporting obligations?
Each ALE member must file the Form 1094-C (transmittal
form) and Form 1095-C annually with the IRS, as well as
provide the related Form 1095-C benefit statements to
employees listed in the Form 1094-C.
6. What type of information is reported on the
Forms 1094 and 1095?
Following is the type of information required for these
forms. Note: this information is based on the 2014 edition
of the forms and instructions. The IRS has released draft
editions of the 2015 forms; it is anticipated that final
versions of the 2015 forms and instructions due for the
2016 reporting year will be released in late 2015.
Form 1094-C
Part I of the form requests identifying information
about the ALE such as name, EIN, address and contact
information of the person submitting the form.
Part II requests further details relating to whether the
reporting employer is part of an aggregated group, the
number of 1095-C forms filed by the reporting entity, and
indication of the applicable type(s) of coverage used by
the employer in its offer of health coverage to its full-time
employees.
Part III is set up in a chart format. Here a reporting entity
would complete a month by month tally of whether an
employer offered MEC to 95% of its full-time employees
and their dependents, the number of full-time and non-full-
time employees employed for each month, the number of
months the reporting employer was part of an aggregated
group, if applicable, and whether the employer certifies
eligibility for transition relief available for employers
employing between 50-99 employees, or 100 or more
employees. It is important to note that all covered lives
must be reported, whether full-time or not.
Part IV is completed if the ALE member indicated in Part I
that it is an aggregated ALE group member. Regardless of
the number of members in the aggregated ALE group, the
entity completing the form would list up to 30 members in
descending order, beginning with the first member with the
highest average monthly number of full-time employees.
Part III, column (d) would also need to be completed to
indicate which months it was part of an aggregated ALE
group.

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Form 1095-C
The Form 1095-C is used to report information to the IRS
about each employee and for determining eligibility for
premium tax credits. It is also provided to each employee
included in the report.
Part I requests the name, Social Security number and
mailing address for each employee as well as identifying
information about the ALE such as name, EIN, address and
contact information of the person submitting the form.
Part II requires an indicator code to be entered on a
per month basis of the type of coverage offered to the
employee. For example, Code 1A would designate a
qualifying offer of MEC providing minimum value offered
to full-time employees and their dependents with the
employee contribution for self-only coverage not to exceed
9.5% of household income. Then, the employer would enter
the employee’s share of the lowest cost monthly premium
for self-only minimum value coverage. Depending on the
indicator code entered, a reporting entity would then
indicate by using another series of codes whether any of
the IRC Section 4980H safe harbor codes need be used.
For example, a Code 2A would designate an employee who
is not full-time. A Code 2F would designate that a W-2 safe
harbor is used as it relates to affordability.
Part III, Covered Lives, need only be completed if an
employer sponsors a self-insured plan in which the
employee enrolled, regardless of whether the employee
works full-time. This part requires the names, Social
Security numbers or dates of birth, and a series of check
boxes to indicate the months the individuals had coverage.
7. What is the reporting obligation of insurers,
self-funded plans and other health coverage
providers?
Internal Revenue Code Section 6055 requires insurers,
self-funded plans and other providers of MEC to file
an annual report to the IRS for purposes of reporting
individuals covered by MEC. This requirement applies
without regard to plan size.
8. What forms are used to satisfy the reporting
obligation by insurers, self-funded plans and
other health coverage providers?
Insurers, self-funded plans and other providers of MEC file
Form 1094-B and Form 1095-B to the IRS. These reports
advise the IRS about whether the individual was covered
by MEC. This requirement applies without regard to plan
size
A self-funded plan sponsor subject to employer shared
responsibility requirements can accomplish its MEC
reporting obligation by completing Form 1094-C and Parts
I, II and III of Form 1095-C. Self-funded plans that are not
subject to shared responsibility requirements complete
their obligation on the Form 1094-B and 1095-B.
If the health coverage is insured, the insurer provides the
MEC reporting and accomplishes this on the Forms 1094-
B and 1095-B, and provides the 1095-B to the insureds
listed in the Form 1094-B.
If the health coverage is obtained through the marketplace,
the reporting is accomplished by the marketplace on the
Form 1095-A.
9. What is the deadline for filing the Forms 1094
and 1095 with the IRS?
The first filing required for the 2015 calendar year is
due in 2016. The Forms 1094 and 1095 must be filed
with the IRS no later than February 28th of each year (or
March 31st of each year, if filed electronically), reflecting
information for the previous calendar year.
10. What’s the deadline for providing the Form
1095 benefit statements to employees?
Individuals listed in the relevant transmittal forms 1094
and 1095 must be furnished a copy of the relevant Form
1095 annually by January 31st of each year (or, by the next
business day if this date falls on a Saturday or Sunday).

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11. What methods can be used to provide benefit
statements to employees?
Paper copies of the Forms 1095-C can be mailed or they
can be provided electronically as long as the recipient
employee affirmatively consents to receive the statement
in an electronic format.
12. Is there a penalty for not completing these
reports?
Yes. An ALE member that fails to comply with the
information reporting requirements may be subject to the
general reporting penalty provisions under IRC Section
6721 (failure to file correct information returns) and IRC
Section 6722 (failure to furnish correct payee statement).
• The penalty for failure to file an information return
generally is $100 for each return for which such failure
occurs. The total penalty imposed for all failures during
a calendar year is capped at $1.5 million. Beginning
in 2016, the penalty for failure to file an information
return increases from $100 to $250 for each return
for which such failure occurs. The cap on the total
penalty imposed for all failures during a calendar year
increases from $1.5 million to $3 million.
• The penalty for failure to provide a correct payee
statement is $100 for each statement with the total
penalty for a calendar year capped at $1.5 million. For
payee statements required to be provided beginning
January 1, 2016, the penalty for failure to provide a
correct payee statement increases from $100 to $250
for each statement. The cap on the total penalty for a
calendar year increases from $1.5 million to $3 million.
• Special rules apply that increase the per-statement
and total penalties if there is intentional disregard of
the requirement to furnish a payee statement.
The waiver of penalty and special rules under IRC Section
6724 and the applicable regulations, including abatement
of information return penalties for reasonable cause, may
apply to certain failures under IRC Section 6721 or 6722.
13. Where can I get more information?
IRS Forms and Instructions – Section 6056 Reporting
• Instructions for 2014 Forms 1094-C and 1095-C (PDF
or HTML)
• 2014 Form 1094-C, Transmittal of Employer-Provided
Health Insurance Offer and Coverage Information
Returns (Draft 2015 Form 1094-C)
• 2014 Form 1095-C, Employer-Provided Health
Insurance Offer and Coverage
(Draft 2015 Form 1095-C)
IRS Forms and Instructions – Section 6055 Reporting
• Instructions for 2014 Forms 1094-B and 1095-B (PDF
or HTML)
• 2014 Form 1094-B, Transmittal of Health Coverage
Information Returns (Draft 2015 Form 1094-B)
• 2014 Form 1095-B, Health Coverage (Draft 2015
Form 1095-B)
IRS Publications
• Publication 5200: Affordable Care Act: What employers
need to know
• Publication 5208: Affordable Care Act: Are you an
applicable large employer?
• Publication 5196: Understanding employer reporting
requirements of the health care law
• Publication 5215, Affordable Care Act: Reporting
Responsibilities for Health Coverage Providers
• Information Reporting by Applicable Large Employers
IRS Questions and Answers
• Questions and Answers about Employer Information
Reporting on Form 1094-C and Form 1095-C
• For reporting requirements under IRC Section
6056, including guidance on who is an ALE
member, see Section 4980H Questions and
Answers and Section 6056 Questions and Answers.
• For additional details about reporting requirements
applicable to sponsors of self-insured health
plans under IRC Section 6055, see Questions
and Answers on Information Reporting by Health
Coverage Providers.
CBIZ Resources
Health Reform Bulletins
• HRB 110: Draft 2015 versions of ACA Reporting Form
1094 and 1095 Series (6/22/15)
• HRB 106: Finalized ACA Reporting Forms (2/16/15)
• HRB 92: IRS Final Rules – IRC Sections 6055 and
6056 (3/14/14)

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CBIZ ACA CheckPoint
• Web-based technology tool for CBIZ clients that
performs:
• On-going workforce data collection throughout the
year
• Recurring calculations involving FTEEs
• Benefit offer tracking
• Signature-ready IRS Forms 1094 & 1095, both B
and C Series
• Stays current with evolving ACA compliance
requirements
• Access to educational collateral and videos, as well
as human expertise pertaining to ACA compliance
and reporting
• Video demos for clients available via CBIZ.com.
1. Dependents include employee’s son or daughter through end
of month of his/her 26th birthday. It does not include step or
foster children, certain non-US citizen children, or spouse.
2. A credit employee is one who works at least 30 hours per
week and who is eligible for a premium tax credit or cost sharing
assistance for buying insurance through a marketplace.
3. The excise tax penalty under IRC §4980H(a) is projected to
increase to $2,080 for 2015; $2,160 for 2016.
4. A credit employee is one who works at least 30 hours per
week and who is eligible for a premium tax credit or cost sharing
assistance for buying insurance through a marketplace.
5. These penalties are indexed beginning in 2015. The excise
tax penalty under IRC §4980H(a) is projected to increase to
$2,080 for 2015; $2,160 for 2016. The excise tax penalty under
IRC §4980H(b) is projected to increase to $3,120 in 2015;
$3,240 in 2016.
Footnotes