The Internal Revenue Service (IRS) has released much-anticipated final Forms 1094-B, 1094-C, 1095-B and 1095-C, which will be used to enforce Internal Revenue Code Section 4980H employer penalties, as well as individual mandate and tax credit eligibility rules under the Affordable Care Act (ACA). Issued under Code Sections 6055 and 6056, the Forms were originally released as drafts last July with draft instructions following in August. The final B Forms are almost identical to the drafts and will be utilized almost exclusively by insurers. The changes to the C Forms are primarily to the instructions and answered outstanding questions about reporting, such as:
- Employers subject to the shared responsibility provisions of the ACA (called applicable large employers or ALEs) that sponsor self-funded plans may satisfy their Code Sections 6055 and 6056 reporting obligations using the C forms, including reporting for enrolled non-employees (such as COBRA beneficiaries).
- Employers with 50-99 Full Time Equivalents (FTEs) who were exempt from compliance in 2015 must still file these forms for the 2015 tax year.
- Employers within a controlled group that share employees should each give an employee a required report and file it. However, only the Employer for whom the employee works the most hours has to report the individual as its employee on its filing.
- Self-insured employers must provide a 1095-C to each full-time employee that accepts a qualifying offer and enrolls in coverage.
- Plans that exclude spouses covered or offered health coverage through their own employers must still be considered to receive “an offer of health coverage” for reporting purposes.
- When counting employees for reporting purposes, employers are allowed to use the first day of the first payroll period of each month or the last day of the first payroll period of each month, as long as the last day is in the same month as when the payroll period starts.
- Employers can report offering coverage for a month only if the employer offers coverage for every day of that month. Consequently, employees eligible mid-month are considered covered on the first day of the next month. However, if an employee terminates mid-month, the coverage is treated as offered for the entire month if the coverage would have continued for the full month without the termination.
- More than one Form 1094-C may be filed by an employer with different divisions as long as one is designated the authoritative transmittal – this includes a governmental employer reporting for related agencies using an authoritative transmittal.
- Employers may take advantage of transition relief and report coverage as offered to employees they are “deemed” to have covered on the Form 1094-C. This includes employers contributing to multiemployer plans for union employees, employers sponsoring non-calendar year plans, and employers intending to add coverage for dependents under the transition rules. However, on the Form 1095-C only actual (not deemed) offers of coverage are reported.
- IRS Publication 5196, a two-page brochure, summarizes these reporting requirements. It is intended to help employers subject to the ACA’s shared responsibility provisions prepare for monthly tracking of offer and coverage information by summarizing the purposes of the Forms and providing a checklist of information needed to complete the forms.
What this means to you – mandatory filing will take place in early 2016 for 2015 coverage information. Employers must collect the necessary data now. Keep in mind that there may be additional revisions to the instructions and forms between now and your first filing obligation. The filing requirements include:
- Each employer that must comply with the ACA’s shared responsibility provisions may satisfy the reporting requirements by filing a Form 1094-C and, for each full-time employee, providing a Form 1095-C.
- Employers not subject to the ACA’s employer shared responsibility provisions that sponsor self-insured plans must file Forms 1094-B and 1095-B to satisfy the reporting requirements.
- All employers must furnish a Form 1095-C to each of its full-time employees by January 31st following the reporting year. Any employer filing a Form 1095-B must furnish a copy to the person identified as the responsible individual named on the Form.
Copies of the final forms, instructions, and publication can be found here:
• B Form Instructions
• C Form Instructions
• Form 1094-B
• Form 1095-B
• Form 1094-C
• Form 1095-C
• Pub. 5196
If you have any questions about employer reporting obligations under the ACA Reporting Forms or any other employee benefits matter, feel free to contact Dannae Delano or Jamie Westbrook.