IRS Form 1095-C | Noncompliance Penalty | Ohio CPA Firm | Rea CPA

Make BIG Changes Or Face BIG Fines

IRS 1095-C - Ohio CPA Firm

Many things have changed over the last few years with regard to the Affordable Care Act (ACA). The ACA has gone through its ups and downs, legal challenges and delays in implementation, but now most of the requirements are live, including a couple big changes that you need to act on … fast.

Tackle the 1095-C – like, yesterday

If you have more than 50 employees, you are now required to file Form 1095-C with the IRS in early 2016, with forms due to employees by Jan. 31. This form will be used to prove the availability of insurance offered to employees, and determine whether you’ll be hit with a pay-or-play penalty. Think of the 1095-C like a W-2, but for health insurance instead of wages. It’s not optional … and just like with a W-2, if you fail to comply, you will face per-employee penalties.

You may already have someone handling this reporting for you, either internally or externally. If that’s the case, check in with them and make sure everything is on track for January.

If not … drop everything and take care of this responsibility immediately. You don’t have time to waste. The clock is ticking – filings are due soon, and you may find yourself unable to secure a third-party provider. In fact, the top payroll companies are already booked to capacity, with wait lists that are growing by the day.

If you haven’t secured a provider, consider consulting an advisor who can help generate data points for the form – which can be the most time-consuming aspect of the process. Once you’ve compiled this data on all of your employees (i.e. the status of health insurance coverage for every month that person was employed with you), you can fill out the form internally, if need be.

Pick a side – or pay up

Due to recent changes, the ACA has left employers of all sizes with two options:

  1. provide all full-time employees with affordable, quality insurance coverage or
  2. offer no health care at all. It’s “all or nothing” these days – there’s no longer any middle ground, such as providing partial premium reimbursement.

In fact, if you don’t pick a side and are found wandering around in this middle ground, you could be heavily penalized, to the tune of $100 per employee, per day. That’s up to $36,500 per employee, per year.

To avoid risking major penalties, ensure your reporting is timely and abide by the “all or nothing” mandate.

The bottom line

So, what’s this going to cost you?

Full coverage. Offer employees full health care coverage, and you’ll be responsible for paying your employer share of premiums; no penalty will be assessed under the ACA.

No coverage. If you decide not to provide your employees with health insurance, you will be fined $2,000, per employee, per year (with the first 30 free under the standard rules).

Partial coverage/premium reimbursement, etc. Remember, this can now put you at risk for high excise taxes … up to $36,500 per employee, per year, for a full year. It is usually far less expensive to offer no coverage, pay the pay-or-play penalty, and then increase general W-2 compensation.

The “all or nothing” mandate applies to companies of any size; the “play-or-pay” penalty and 1095-C reporting requirements, on the other hand, apply only to those companies with 50 or more employees.

These recent changes are sure to shake some things up. It’s better to be proactive and make sure you’re in compliance than to risk it and face huge penalties.

If you are one of the many business owners in America who are having problems finding a service provider who can help you locate the required information needed to file your 1095-C forms for a reasonable price, call me, Joe Popp, today at 614-923-6577 or email

By Joe Popp, JD, LLM (Dublin office)