The Clock Is Ticking On ACA Compliance

Is your organization digging into your benefits data yet? We are only a few weeks away from the compliance deadlines imposed by the Affordable Care Act (ACA).

For the current 2015 tax year, Applicable Large Employers (ALEs) with 50 or more Full Time or Full Time Equivalent employees must file new forms with the IRS and provide them to employees to be in compliance with the ACA.

Form 1094 and 1095

Form 1094 is titled “Transmittal of Employer Provided Health Insurance Offer and Cover Information Returns.” While the title is long, it will likely prove to be the easier of the forms to complete. It provides data about the employer, the months where “Minimum Essential Coverage” was offered, the number of full time employees, and whether the employer qualifies for Transition Relief (50-99 lives).

Form 1095 titled “Employer-Provided Health Insurance Offer and Coverage Insurance” is far more onerous. This is the form that must be provided to each full time employee that was eligible for coverage, AND any part time employees (under 30 hours a week) who elected medical benefits. Coverage, cost, and appropriate codes must be detailed BY MONTH for each employee.

Below is an example of the data required for a Fully Insured Health Plan:

Employee Example:

Tina was a full time employee at XYZ Company during part of tax year 2015. She was enrolled in the Health Plan from January 1 through February 28, 2015 and when she terminated employment. Tina’s Form 1095-C would need to indicate she received an offer of coverage on line 14 for January and February. (XYZ Company might use Code 1C – coverage offered to Tina and all dependents.) The remaining 10 months on the form would require a different code be utilized to show no qualifying offer was made (Code 1H).

Self Insured Plans Require More Data

If your medical plan is self-insured, employers have an additional data reporting burden. Spousal and dependent data is required to be reported by month on form 1095, not just employee data.

Transmission to the IRS

Form 1094 and copies of every Form 1095 provided to employees must be transmitted to the IRS. If the employer produces 250 or more returns, you MUST file electronically through a special system the IRS has created called AIR (ACA Information Returns.) If you are required to file electronically and fail to do so, you can be penalized $250 per paper return in excess of the 250 threshold. These fines can add up quickly.

Please note: This communication is designed for introductory informational purposes. The contents are summaries and are not intended to cover every aspect of the topic, law or regulation being discussed. The information contained in this post and website does not constitute legal or tax advice. To ensure full compliance based on your unique organizational requirements, discussion with your attorney or tax professional is recommended.

Important Plan Limits for 2016

Every year, the IRS announces important plan limits for High Deductible Health Plans, Health Savings Accounts, Flexible Spending Accounts and 401(k) plans. Important limits for 2016 are summarized below.

Flexible Spending Accounts:

The maximum deferral to a Medical Flexible Spending Account remains at $2,250.

Qualified Transportation Benefits

2016 Limits Change from 2015
Commuter vehicle and transit pass $130 No change
Qualified Parking $255 +$5



High Deductible Health Plans

For 2016, the IRS has indicated the minimum deductibles for a plan to be considered “qualified” remain unchanged, however, the Maximum Out of Pocket limits have increased.

2016 Limits Change from 2015
HDHP minimum deductibles $1,300 single only

$2,600 family

No changes
HDHP out of pocket maximum $6,650 single only

$13,100 family

+$100 single only

+$200 family

HSA Contribution Limits $3,350 single only

$6,750 family


Combination of employer and employee contributions

No change single only

+$100 family


Please keep in mind, the out of pocket limits listed by the Affordable Care Act are higher than the permissible IRS maximums. To qualify for a Health Savings Account, OOP Maximums may not be higher than those listed above.

Is your single HDHP deductible greater than $6,650 for 2016?

If so, you may need to make plan design changes to allow an embedded self-only deductible for those electing family plans to comply with the ACA.

Retirement Plan Maximums

On October 21,2015 the IRS announced limits for 401k plans will remain the same for 2016.

2016 Limits
Maximum employee deferral $18,000
Catch Up Contribution Limits

(Employees 50+)