In 2016, Some Employers Will Need AIR

Healthcare ReformAffordable Care Act Information Returns

ALE (Applicable Large Employers) will need to report certain information on their employer-sponsored group health coverage to both participants and the IRS starting in early 2016.

Any employer who is preparing 250 or more information returns* must file those returns electronically with the IRS using its new ACA Information Returns system, also referred to as the “AIR” system, by March 31, 2016.1

With the end of the year fast approaching, employers need to consider whether their own IT professionals will file information returns electronically with the IRS, or rely on their payroll provider or other outside vendor to do this on their behalf.

The AIR system requirements are complicated, and they allow for third-party vendors to file on an employer’s behalf. The IRS recently updated its IT requirements that employers will need to be up to date with in order to comply with this process.

Any employer that plans on filing ACA information returns without assistance from an outside vendor will need designate a responsible official2 and additional contacts at their organization (typically IT professionals) and take steps to register with IRS e-services.

Just because you have a payroll service, doesn’t mean ACA filing is covered as part of payroll. If you have a payroll service, they can provide you with payroll records, for reporting hours, but that doesn’t imply that they automatically file your ACA reports. Check with your payroll provider ahead of time to see if additional software is needed to file your ACA reports.

*Note that this requirement refers to the number of returns that will be filed, not the number of FTEs.

Cited:

  1. http://www.irs.gov/PUP/for_taxpros/software_developers/information_returns/AIR_Composition_and_Reference_Guide.pdf
  2. Responsible official: http://www.irs.gov/PUP/for_taxpros/software_developers/information_returns/April_AIR_Webinar_Presentation.pdf
  3. Registration for IRS e-services: http://web.archive.org/web/20161223042022/https://la1.www4.irs.gov/e-services/Registration/index.htm