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Top ACA Compliance Questions: How Can I Tell What I Need To File?

How do I even know if I need to file the 1095-C?

To determine if you are a large employer that must file the 1095-C form, you will use calculations from the full year 2014 to count your Full Time Equivalents. If you are an Applicable Large Employer in your state (the definition of an ALE is different than the nationwide above-50 standard in Colorado, Connecticut, Washington, Oregon, Virginia, Vermont, Maryland, Nevada and the District of Columbia, look into your state resources to confirm), you must file regardless of whether or not you offered benefits, and all employers of this size, including for-profit, nonprofit, and government entities must participate.

Whether an employer is an ALE is determined each calendar year, and generally depends on the average size of an employer’s workforce during the prior year. If an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is not an ALE for the current calendar year. Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting provisions for the current year.

How do I calculate hours worked?

The IRS has a specific definition for “hours of service” that requires more than simply noting the number of hours that an employer expects an employee to work.

When it is difficult to determine the precise number of hours an employee works, the employer must determine a consistent way to measure them that is clearly understood by both the employee and the administrator who tracks the employee’s hours. This ensures that an “hour of service” recorded by the employer’s payroll system meets the IRS definition.

The IRS offers detailed advice on calculating your employees’ hours worked and how many FTE employees you actually have here.

Side note: In terms of recording employee termination, if an employee terminates employment on any day other than the last day of a month and the coverage or offer of coverage expires upon termination of employment, the ALE should enter code 1H on lne 14. If the coverage or offer of coverage would have continued if the employee had not terminated employment during the month, the ALE should enter code 2B on line 16 for that month.