One of the following will be a fact when the sun sets on Sunday, February 7, 2016. Which one do you think it is?

1. The New York Jets will be NFL champions after dispatching the New York Giants in Super Bowl 50 in Santa Clara.
2. Your employees will have received Internal Revenue Service (IRS) Form 1095-C from you, which they need to complete their 2015 federal Form 1040 individual tax return.
3. Your employees will be completely knowledgeable about the information on Form 1095-C and will not confuse it with the 2015 Form W-2 you also sent them (perhaps in the same envelope).

If you picked 1, you are a wearing a Joe Namath jersey and have limited knowledge of football. If you picked 2, you are fine as long as they received it by February 1, 2016. If you picked 3, you still have enough time to make it happen if you start planning and working on it now.

Let's review Form 1095-C, which provides employees eligible for employer-sponsored health insurance under the Patient Protection and Affordable Care Act (ACA) with information about their options, and why an Applicable Large Employer (ALE) such as your company needs to prepare it and distribute it to employees.

The ACA mandated that ALEs must provide evidence that 70% of your employees were offered minimum essential coverage (MEC) in an employer qualified health plan (QHP) during 2015. The QHP can be self-funded by you as the employer, or you could have fully insured the plan with a health insurance provider. This task is required under IRC Section 6056. Form 1095-C (along with the companion Form 1094-C, a cover sheet a reporting employer must send the IRS) is used in determining whether an employer owes a payment under the employer shared responsibility provisions of IRC Section 4980H.

This new administrative task comes with a complete new set of instructions from the IRS, and the ALE has the choice of preparing the form using its own human resources (HR) information system or hiring a third-party administrator to do so.

For the task, you must be prepared to identify the following characteristics of each covered employee:

1. Status: Full-time, part-time, seasonal, temporary, or other unique employee permissible classifications you use.
2. Social Security number (SSN) of each employee:
That includes trying at least twice to collect the SSNs of all Covered Individuals whom the employee elected to insure in the QHP, with a fallback to the covered individuals' date of birth.
3. Election of health coverage: Full year, or the specific months of the year for the employee and each covered individual. Example: If an employee works in January, February, October, November, and December, the employer must check those months; i.e., you cannot reply "five months."
4. The employee's cost of their lowest-cost option, not necessarily the plan or level of coverage they have chosen.

While we are discussing Form 1095-C, let's include a short reminder that each ALE also has to file Form 1094-C, which is the transmittal document to the IRS. Fortunately, an electronically filed Form 1094-C is not due until March 31, 2016, which shouldn't cut into too much of your time to enjoy March Madness.

Only one Form 1094-C is required, but you will need to make sure that, as part of the preparation, an authorized company officer is required for the attestation.

There are unique differences regarding the sections of Form 1095-C that pivot off the method of plan insurance. In general (and disregarding some of the finer print):

1. Self-insured QHPs must report information in Parts I, II, and III of Form 1095-C.
2. Fully insured QHPs must report information in Parts I and II of Form 1095-C. Note that this memo does not mention Form 1095-B, which is the form the insurer must separately send to your covered employee.

And there are some penalties for incorrect filings, or "failures" in IRS parlance:

- Failure to file an information return generally is $250 for each return for which such failure occurs. The total penalty imposed for all failures during a calendar year cannot exceed $3,000,000.
- Failure to provide a correct payee statement is $250 for each statement with respect to which such failure occurs, with the total penalty for a calendar year not to exceed $3,000,000.
- Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to furnish a payee statement.

I'd be leaving something out if I don't acknowledge that the IRS does provide relief from so-called failures if "good faith" efforts are made. I will, however, spare you the details.

To close, and offered as an FYI, the IRS estimates that the time needed to complete and file these forms will vary depending on individual circumstances. The estimated average time is four hours for Form 1094-C and 12 minutes (not a typo) for Form 1095-C.

Good luck! And I will follow up next year when ALEs have to cover 95% of your employees.