ACA Simplified-Reporting Threshold Must Be Met Each Month, IRS Official Says

Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...

By Lydia Beyoud

Aug. 13 - Employers need to be sure they are offering affordable, minimum-value coverage to at least 98 percent of the employees on whom they report under the Affordable Care Act on a monthly basis, rather than a yearly average, in order to use simplified reporting rules, an IRS official said.

Employers that have part-time employees close to the 30-hours-per-week threshold for inclusion as full-time workers might want to include them in their total count, to take advantage of the simplified reporting method, Ligeia Donis, senior technician reviewer for the Office of Chief Counsel's Employment Tax Branch, said Aug. 13.

Donis spoke during a webinar sponsored by the American Bar Association Joint Committee on Employee Benefits and co-sponsored by several ABA sections.

Final rules (T.D. 9661), issued March 5, on the employer shared-responsibility provisions, or employer mandate, of the health-care law allow employers to meet their information reporting requirements under tax code Section 6056 while avoiding having to identify which of their employees are full time.

Section 6056 requires employers to report to the Internal Revenue Service information about their compliance with the ACA's employer shared-responsibility provisions under tax code Section 4980H and about the health-care coverage they offer employees.

Play It Safe

In a hypothetical example of an employer with 50 full-time employees and 30 part-time employees who are scheduled to work approximately 27 hours a week, "I may just lump those 30 employees that may or may not end up being full time for 4980H purposes in with the 50 that are definitely full time," Donis said.

It could be that some of the part-time employees "never hit the 30-hour mark-maybe some work only 25 hours, maybe some work 32-but you've covered yourself," she said.

"At the end of the day, you may end up reporting on some employees that were technically non-full time under 4980H, but as long as you offer to 98 percent of the employees that you report on and you report on at least all of your full-time employees," employers should be able to use the simplified method, Donis said.

Although employers will make an annual certification that coverage was offered to 98 percent of their employees, because the offer is done on a monthly basis, they must be sure they actually hit that number each month, Donis said.

The number can't be averaged over the course of the year, she said.


To contact the reporter on this story: Lydia Beyoud in Washington at

To contact the editor responsible for this story: Cheryl Saenz at

Request Bloomberg Law for HR Professionals