Tax & Accounting Blog

What employees need to know about the upcoming ACA forms

Blog, ONESOURCE, Tax Information Reporting September 17, 2015

The Affordable Care Act (ACA) requires all employers with 50 or more full time employees to provide affordable health coverage to their employees. As a result, most US employees will receive new ACA related tax forms early next year.  It is quite possible that many employers will be inundated with questions about new tax forms if no further communication is provided; after all, these are tax forms and they do look daunting with many unrecognizable terms.  Most employees will likely receive a form indicating that they had health coverage for all 12 months and unless there are errors on the form, their only consideration will be to store the form in a safe place and indicate that they had health coverage for all 12 months on their federal income tax return.  The reality is that most people become apprehensive about receiving new tax forms. The more an employer can do to educate their employees about the forms and their purpose, support lines are less likely to  be inundated with frustrated employees.

Luckily, empowering and educating employees about ACA forms is a manageable process provided the process is started early.  Making use of a direct email campaign and leveraging employee portals maximizes the opportunity to reach employees with relative ease and should be done periodically.  One important decision an employer can make is to ensure they include a custom letter with the form which explains the purpose of the form, how it should be reviewed and who to contact if they have questions.  Leaving employees to decipher what is meant by “Employee Share of Lowest Cost Monthly Premium, for Self-Only Minimum Value Coverage” with only the instructions for guidance is a recipe rife for mass confusion so anything an employer can do to gradually build up awareness will be well rewarded.

Thomson Reuters ONESOURCE offers comprehensive ACA reporting and compliance solutions to keep you prepared,  prevent filing inaccuracies and penalties so you can continue to ensure your company’s good reporting health. Download our FREE Employee Communication Template or sign-up for our ACA Email Course for more information.