Tax Form to List Care Costs a Challenge for Employers

Businesses that haven’t started keeping track of timely information needed for a new healthcare tax form should start sooner rather than later, local accountants said.

Under the new healthcare law, employers with 50 or more full-time employees are required in January to file tax form 1095C, which requires an employer to report the monthly healthcare costs for each individual employee.

“The biggest trouble we’ve seen is just getting the word out there for small businesses, who it applies to and what they really need as far as record-keeping on a monthly basis,” said Adam Cohen, associate director of tax services at Berkowitz Pollack Brant. “My suggestion would be to start it right away. Waiting until the end of the year to compile everything is not the best solution.”

A Supreme Court decision that upheld the Affordable Care Act means the healthcare tax forms are here to stay. Under the healthcare law, employers with 50 or more full-time employees are required to offer affordable healthcare coverage to their employees. The form is meant to show the Internal Revenue Service whether an employer complied with the law or not.

Smaller businesses with less than 100 employees have until 2016 to offer such coverage plans, but they’re still required to file the form in January.

“In general, with companies that are doing that much reporting of payroll, it’s being done with a payroll processing company,” said David Wrubel, CPA. He suggests employers use such a company “because it would be very labor intensive to track that otherwise.”

But not all smaller businesses, those with 50 to 99 employees, use a payroll processing company that can tally this data for them. Those that manage payroll internally might face difficulties tracking the information from months prior.

Now is the time for those employers to contact CPAs to make sure they have the proper reporting system in place, the accountants agreed.

“I think there will be questions as companies do it for the first time, but I don’t expect it in the long-run to be confusing,” said Louis Balbirer, a principal in the tax services department of Kaufman Rossin.

Rosamaria Bravo, a CPA with Morrison, Brown, Argiz & Farra, said the company has given its clients Excel spreadsheets to help them track the information.

“This is all new for everybody,” Mr. Wrubel said. “We have to make sure it’s being done correctly.”