The IRS has just released draft copies of the forms employers will need to meet their reporting requirements under the Affordable Care Act.
The Affordable Care Act adds two new sections of the Internal Revenue Code that require many employers, beginning in 2015, to file additional forms to provide information needed to confirm compliance with the ACA’s “individual mandate” (Section 6055) and “employer mandate” (Section 6056) provisions.
Requirements for Applicable Large Employers
An important part of IRS enforcement of the “employer mandate” or “shared responsibility” provision of the ACA is the 1094-C and 1095-C reporting forms.
These forms are required to be filed by all “applicable large employers” — those with 50 or more full-time employees plus full-time equivalents. The Form 1095-C, which lists the employee’s name, address, and social security number, must be filed for each covered employee (and a copy must be sent to the employee). The employer must check a box for each calendar month during which the employee was offered coverage under the employer’s group health plan. The employer also must list the employee’s share of the premium for self-only, minimum-value coverage. Using feature codes, the employer will also list additional information about the coverage, such as:
- Whether coverage provides minimum actuarial value
- Whether coverage was “affordable” or met an affordability safe harbor
- Whether coverage was offered to employee only, and/or spouse and dependents
- Reasons why coverage not offered
- Whether effective dates of coverage were affected by waiting periods
- Name, address, and EIN of anyone filing on behalf of the employer
The Form 1094‑C is a transmittal form which accompanies the 1095-C forms. On this form, the employer provides its contact information and certifies that it is an Applicable Large Employer or a member company of an Applicable Large Employer. The employer lists the total number of 1095-C forms filed, and lists the total number of full-time employees and full-time equivalents it employs, as well as the total numbers for any affiliated employers.
Employers with fewer than 100 employees who are eligible for transition relief must certify their eligibility for relief on the 1094-C transmittal form.
Requirements for Employers Sponsoring Self-Funded Plans
Employers of any size that sponsor a self-funded health plan are also subject to IRS reporting requirements related to the minimum essential coverage requirement (carriers will handle this reporting requirement for employers with insured plans). The “individual shared responsibility” provision of the ACA requires that each provider of “minimum essential coverage”, including employers that sponsor self-funded coverage, report the identities of all individuals who are covered under the plan at any time during the year.
This information is reported on the 1094-B and 1095-B forms. Form 1095-B is submitted for each individual who is enrolled in minimum essential coverage (MEC). This form includes the name, address, and Employer Identification Number (EIN) of the employer sponsoring the plan; the name, address, and social security number (SSN) of the employee; and the name, address, and SSN of each individual covered by the plan (i.e., spouse and dependents of the primary insured). The plan sponsor must list the months for which any named individual was enrolled in coverage for at least one day in the month.
Form 1094‑B is the transmittal form that accompanies the 1095-B forms. It includes contact information for the plan sponsor and the total number of 1095-B forms submitted.
Filing Instructions and Deadlines
High-volume filers (those filing more than 250 transmittal forms) must file electronically. Other filers can file either on paper or electronically. Paper returns must be filed by February 28. Electronic returns are due March 31.
In addition, each employee named on a 1095-B or 1095-C must be provided a written statement (for example, a copy of the 1095-B or 1095-C) which includes the employer or plan sponsor’s contact information and all information reported on the form about the employee (for example, whether the employee was enrolled in Minimum Essential Coverage). These statements must be sent to each employee no later than January 31. They may be provided electronically but only if the employee affirmatively consents to electronic delivery.
This article refers to regulations issued through August 25, 2014. It is intended to be a summary of important issues and should not be considered legal or tax advice.
© Bell Associates and “Ask the Professionals,” 2014. Unauthorized use and/or duplication of this material without express and written permission from Bell Associates is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Bell Associates and “Ask the Professionals” with appropriate and specific direction to the original content.