An employer filing Form 1094-C must disclose to the IRS the names and EINs of the other employers in its aggregated group. If considered a large employer, the company would be subject to the ACA shared responsibility payment rules and the Forms 1095-C/1094-C filing requirements even though it has fewer than 50 full-time employees. Thus, a company with fewer than 50 full-time employees could be a large employer due to being in an aggregated group with other companies. Making this determination can be complex because employees of entities in an aggregated group are added together to determine whether the 50-employee threshold is met. Therefore, an employer must determine if it meets the 50-employee threshold for the current calendar year by evaluating its workforce for the prior calendar year. Determining large employer statusĪ large employer, as defined under the ACA, is an employer with an average of at least 50 full-time employees (including full-time equivalents) during the preceding calendar year. The penalty applies for 2015 and subsequent years. The IRS determines which large employers owe the penalty based on information from the employer’s Forms 1095-C and 1094-C and its employees’ individual income tax returns.
The payment, commonly known as the “pay or play” penalty, applies to for-profit and non-profit organizations, including churches and governmental entities.
The IRS is actively assessing employer shared responsibility payments on large employers that do not offer health coverage that meets Affordable Care Act (ACA) standards. This article was originally published on January 22, 2020, and has been updated.
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