The Patient Protection and Affordable CareAct (PPACA) reporting deadlines are rapidlyapproaching, presenting a major administrative burden foremployers who face penalties forfailing to report in a timely and accurate manner.

While there has been significant discussion of employer rolesand responsibilities, employees have been largely left out of theequation.

However, many employees will soon be receiving new forms thatare critical to their ability to file their tax returns and totheir employers’ ability to accurately fulfill their own reportingrequirements. Among these are Forms 1095-A, 1095-B, and1095-C.

With this in mind, it is important for employers to educateindividual taxpayers on what they are required to do and when andhow to complete these requirements in the easiest and mostefficient manner.

1095-C

The most commonly received form will be the new 1095-C, whichmillions of Americans will be receiving for the first time thisyear.

This new government form is used to tell the Internal RevenueService that you were eligible for insurance coverage under theAffordable Care Act and whether you took advantage of or waivedthis coverage.

This form will be sent by employers no later than March 31to all eligible full-time employees who worked for a company with atotal of 100 or more full-time or full-time equivalent employees in2015. For the purposes of this form, full-time is any employeeworking 30 or more hours per week or 130 hours in a calendarmonth.

According to the IRS guidance, Form 1095-C helps to determinewhether both the employer and the employee have complied with the“shared responsibility” clause of the ACA.

The form also determines whether an individual or familyqualifies for the Premium Tax Credit, which reduces the burden ofpurchasing health insurance.

Anyone who does not have coverage elsewhere and chose to declineemployer-sponsored health care coverage will be required to pay apenalty for not carrying coverage--this penalty will be assessed ontheir tax return.

For 2015, the penalty for declining all health care coverage is$325 per uninsured adult and $162.50 per uninsured child or 2percent of household income, whichever is greater up to a familymaximum of $975.

The penalty will increase to $695 per uninsured adult and$347.50 per child or 2.5 percent of household income up to a familymaximum of $2,085 in 2016, and will continue to rise with inflationyear-over-year.

However, the IRS offers special exemptions based on income,circumstance and membership in certain groups, so those withoutcoverage should research their options or consult a taxprofessional. (The most common exemption is for those who declinedemployer-sponsored coverage that would have cost more than 8percent of their total household income.)

Health care exemptions can be claimed by filing IRS form 8965with your taxes. As previously noted, the form also determines whomay be eligible for premium credits to help defray the expense ofcoverage.

Employers are required to submit insurance coverage information,along with social security numbers and other identifying employeeinformation to the IRS, and employee failure to disclose a waiverof coverage may result in an audit and penalties greater than theACA individual mandate penalty.

1095-B

Form 1095-B essentially serves the same purpose as form 1095-c,but is used by and sent to employees of companies with fewer than100 employees.

It may also be sent directly by an insurer to certify thatindividuals/families had non-employer sponsored coverage in placein 2015. This coverage may have come from:

• Government health care plans such as Medicare Part A, Medicare Advantage, Medicaid,the Children's Health Insurance Program, and Tricare for militarymembers, veterans’ medical benefits and plans for Peace Corpsvolunteers.

• Health coverage purchased through the "Marketplace" -- Web-basedfederal and state insurance markets set up under the AffordableCare Act.

• Any individual health insurance policy in place before theAffordable Care Act took effect.

Depending on the way a health care plan is structured, someemployees may receive both a 1095-B and a 1095-C.

1095-A

Form 1095-A is only applicable to those who purchased theirhealth care coverage through ACA’s health care exchanges.

This form plays a critical role in reconciling the AdvancedPremium Tax Credits (also known as APTCs)--a yearly stipend basedon modified adjusted gross income designed to help lower-incomeindividuals and families defray the cost of purchasingexchange-based health insurance--for 2015 and in determining futurecredits for 2016.

Per IRS and ACA requirements, any excess APTC received in theprevious year must be repaid through income tax.

What to do with these forms

Like the more familiar W-2 or 1099 forms, the 1095-A, B, and Cwill be needed to file a 2015 tax return for anyone who receivesit.

Those using a tax preparer will need to bring it with them alongwith their other filing documents, and those doing their own taxesor using tax preparation software will need to keep this documentwith their tax records in case of any further inquiry /audit by theIRS.

Help is available

Of course, this is just one important factor in gaining a morethorough understanding of the complexities of the ACA. Whilethe IRS has worked to streamline the process as much as possible,many employers and employees are struggling to understand and keeppace with changing requirements.

There are a number of consulting firms like Quality BusinessSolutions which have teams of experts available to help companiesnavigate this substantial and intricate legislation.

However, for quick questions, there are many good resourcesavailable to both employers and employees. One of the best isthe IRS website. Intuit also has excellent tips andvideos. The QBSblog also can help dispel misconceptions about ACA.

As in all tax-related issues, the most important factors inhandling ACA reporting for all groups are to know what’s coming,prepare in advance, keep excellent records, take note of deadlinesand avail yourself of helpful resources.