In light of the Supreme Court’s King v. Burwell decision, Thomson Reuters today issued an update on the process for companies to comply with the individual and employer mandates of the Affordable Care Act.
The company’s knowledge about this process originates from having created technology for employers to comply with the Affordable Care Act by fully automating all elements of 1095-C reporting requirements.
There is no longer any doubt that businesses that employ more than 50 people on a full-time basis will have to comply with new reporting requirements for the 2015 tax reporting period and beyond. Thomson Reuters has found that those compliance requirements are likely to fall at the feet of contracted payroll and benefits vendors who typically lack the necessary back-office reporting technology.
“HR departments are not accustomed to filing reporting documents with the IRS, but they will be responsible for doing so at virtually every business that employs more than 50 full-time workers,” said Robert Bahash, SVP & managing director of ONESOURCE Trust Tax and Information Reporting at Thomson Reuters.
Darrell Granahan, senior director of implementation, tax information reporting technology at Thomson Reuters, who also sits on a panel of tax professionals who advise the IRS on tax reporting issues, including ACA compliance, said the objective right now was to make the process a non-issue for the business, explaining:
“HR will be charged with reporting to the IRS employee information it may not have, such as the tax ID numbers for dependent coverage. Penalties for batches of documents with mistakes or even typos also create unnecessary risk. In short, many HR departments will panic as reporting deadlines loom and they realize the data they need to report has not been collected by their employer or they lack the back-office technology to properly automate full compliance.”
The IRS is expected to announce its filing taxonomies – Publication 5165 – in August, at which time companies that use the Thomson Reuters 1095-C solution would be able to test it and ultimately meet the Act’s reporting requirements. Employers must furnish 1095-C documents to their full-time workers by Jan.31, 2016 and report them to the IRS by March 31, 2016.