By Joni Andrioff, Don Wellington, Lisa M. Zarlenga, Scott A. Sinder, and Kate Jensen

Joni Andrioff is a Partner in the Chicago Steptoe & Johnson; Don Wellington is Partner in Los Angeles; Lisa M. Zarlenga and Scott Sinder are Partners in Washington DC; and Kate Jensen is an Associate in the Washington DC . Steptoe & Johnson has more than 500 lawyers and other professionals in seven offices across the United States and in London, Beijing and Brussels.

for failure to satisfy the complex filing requirements resulting from the Act () have just doubled. With filing deadlines approaching, should act quickly to ensure they are prepared.

steptoe_300Starting in February 2016, the requires and healthcare to file new information in connection with – healthcare , and provide a copy the return to each .

The annual information are designed to enable the Internal Revenue to enforce the by disclosing whether an or an is subject to non-compliance and whether an is eligible for a when purchasing healthcare a state or federal Exchange.

The information collection requirements for the new information will require a substantial amount data each and from the ’s HR and payroll departments and possibly from its and third-party administrators.

The for failing to comply with the requirements are steep and are scheduled to double in 2016.

The will apply a “good faith effort” standard to information for 2015, and the has stated that no will be for that make no effort to file.

Generally, the is seeking three pieces information about – :

(1) employment information about each (e.g., whether the works -);

(2) whether the and dependents, if , received an healthcare from the ; and

(3) information about the (and dependents, if ).  The information is conveyed on the new information using alpha-numeric .

Under the , each with at least 50 – employees is required to report the employment information and information for each Form (- and ).

In addition, for a self- healthcare plan, the is required to report information on the same Form for each .  For an healthcare plan, the insurer, rather than the , is required to report information on Form ( ).

For with fewer than 50 – employees, different rules apply.  The information is made Form regardless whether the plan is or self-.

For an plan, the provider is responsible for filing Form .  For a self- plan, the is responsible for filing Form .

Although the is responsible for information on Form (or, if fewer than 50 – employees, Form ), the may not actually have any data.

This may occur, for example, where employees enroll for online and, for privacy purposes, the does not capture information.

Accordingly, the may have to communicate with its third-party administrator to obtain the information that it needs to complete Form .

It should be noted that although with at least 50 – employees but fewer than 100 are exempt from the for 2015, such are not exempt from the rules.

Depending an ’s facts and circumstances, abbreviated filing may be available under one three information harbors, including the , the , and the 98% , which are described in more detail in the Instructions to Form .

Absent being eligible to use one these information harbors, an must follow the general requirements.

The general requirements are summarized in the chart below.

Number – Employees Plan Self- Plan
 100 or more files Form , Parts I and II, but not Part III ( information)
Insurer files Form
files Form , Parts I, II, and  III
50-100 (even if exempt from penalty for 2015) files Form , Parts I and II, but not Part III ( information)
Insurer files Form
files Form , Parts I, II, and III
Fewer than 50 Insurer files on Form
does not file
files Form

and are transmitted to the in batches using 1094-B (Transmittal Information) and (Transmittal – and Information ), and each must receive a copy the Form and his or her information.

The for failing to file apply both to the to the and to the to individuals.

The filing deadlines for 2015 and are February 29, 2016 (if filing paper ) or March 31, 2016 (if filing electronically.)

However, draft instruction just issued by the state that filers may obtain an automatic – extension to file these by completing Form 8809 (Application for Extension to File Information ) and filing it with the or before the due date for and . A copy must also be to each no later than February 1, 2016.

As already referenced, a new law recently doubled the for the failure to file correct information , including Form .  Beginning in 2016, the penalty for failure to file correct information will increase from $100 to $250 return.

Because the penalty applies separately to the Form filed with the and the copy furnished to the , may be subject to up to $500 return.

The maximum total annual amount that may be imposed will be raised from $1.5 million to $3 million.  For a form corrected within , the existing penalty $ will be raised to $50, and the maximum total amount will be increased from $250,000 to $500,000.

The rules apply to expatriate (covering both in-bound and out-bound employees) for the commencing July 1, 2015, although, until the issuance regulations, expatriate are exempt from most other requirements.

While consent is generally required before Form may be electronically to an , Form may be to expatriates electronically without obtaining consent.

A non-US company is required to file either Form if the non-US company employs at least 50 – employees in the US, or Form if it employs fewer than 50 – employees in the US.

Additionally, if a non-US company provides benefits to a – who is a US citizen working outside the US, the non-US company may be required to file even if it employs no employees in the US.  The obligation in that case may depend on whether the non-US company is required to issue a W-2 with respect to such an .

The determination the number employees employed by an is made a basis, although the number thresholds are based worked in the United States.

This article originally appeared in the Steptoe & Johnson website, and is reprinted with permission.

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