How Do Non-Calendar Healthcare Plan Years Affect Affordable Care Act Reporting?

Published by Barry McNamara on April 17, 2015

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Before we delve too far into the mechanics of the Affordable Care Act Reporting requirements on non-calendar year plans, let’s back up a few steps to establish a few fundamentals. During the first quarter of 2016 Applicable Large Employers will be required to report information on health coverage offered to full-time employees to the IRS. They will be required to report for a period of time known as their “Stability Period”, one of the ACAs many definitions. This Stability Period, is more commonly understood as the group’s Plan Year.

As you know, the IRS establishes all of their rules and procedures on a tax year/calendar year, and the Affordable Care Act reporting requirements will be no different. For many employers that fact will have no bearing whatsoever, but for many others it will impact their first year reporting, as their Plan Years do not operate on a calendar year basis.

For example ‘Employer A’ has an established Plan Year that runs July thru June. The ACA’s Pay or Play provision for that particular employer becomes effective July 1, 2015. Technically that employer was not subject to this particular provision of the law for the period of January 1, 2015 thru June 30, 2015…leaving them with the question, “how and/or what do I report for 2015?”

The IRS has created Transition Relief for Non-Calendar Plan Years with regard to completing the required forms 1094-C and 1095-C. To qualify for this ‘transition relief’, the Plan Sponsor must have had a ‘non-calendar year’ plan in place as of December 27, 2012. If qualified, the transitional rules allow the employer to report in Q1 2016 the portion of their Stability period that happened to fall in the prior calendar/tax year (2015).

Once through the Transition Relief period (2015 only), these plans will fall right in line with the calendar/tax year reporting cycle. For illustrative purposes, let’s look at Employer A’s reporting cycle:

March 2016 – Report for 7/1/15 thru 12/31/15

March 2017 – Report for 1/1/16 thru 12/31/16

March 2018 – Report for 1/1/17 thru 12/31/17 ….etc, etc.

For more information on Affordable Care Act IRS Reporting, view Benetech’s white paper: The 5-Ws of Affordable Care Act IRS Reporting.