Employers May Now Access Final 2015 Affordable Care Act Reporting Forms
Dannae L. Delano, Jamie M. Westbrook
Sep 21, 2015
The Internal Revenue Service (IRS) has released much-anticipated final Forms 1094 and 1095 for 2015 reporting, 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 final 2015 Affordable Care Act (ACA). The forms were originally released as drafts last summer. The following includes notable changes and clarifications of the final forms:
- Determining whether you are a large employer required to report – the final instructions indicate that employees who are eligible for TRICARE (military) and VA health coverage programs are not counted in determining whether you have 50 or more full-time equivalent employees and are required to report.
- Counting Total Employees – the final instructions allow a large employer to choose any of five permissible days within each month to count total employees, but the same day must be used for all months in the year.
- Reporting Consolidated Omnibus Budget Reconciliation Act (COBRA) offers to terminated employees – an offer of COBRA coverage made to a former employee upon termination of employment is not reported as an offer of coverage on line 14. Instead, the code 1H (no offer of coverage) is entered on line 14 and code 2A (individual not employed) on line 16 for any month for which a COBRA offer was made to a terminated employee. COBRA offers for terminated employees are not reported as offers of coverage under any circumstances, even if a former employee elects the coverage. By entering code 2A on line 16, the reporting employer is protected from potential Code § 4980H penalties for the month.
- Supplemental coverage – the final instructions replace the section on supplemental coverage with a section addressing reporting coverage where there is more than one type of minimum essential coverage. Where more than one type of minimum essential coverage is provided, the provider needs to report only one type of coverage. For example, an employer sponsoring both a self-insured major medical plan and a Health Reimbursement Arrangement (HRA) is required to report coverage under either the major medical plan or the HRA, but not both. In addition, a provider does not have to report minimum essential coverage for which an individual is eligible just because the individual has other minimum essential coverage for which reporting is required. For example, an employer sponsoring either a self-insured or a fully insured major medical plan and an HRA is required to report coverage under either the major medical plan or the HRA, but not both.
- Qualifying Offers – if a full-time employee receives a qualifying offer for fewer than 12 months in the calendar year, the qualifying offer code (1A) on Form 1095-C may be used so long as the employee received a qualifying offer for all months in which the employee was full-time (and not in a limited non-assessment period). An alternative statement may not be used unless the employee received a qualifying offer for all 12 months in the calendar year. Consequently, Form 1095-C, not the alternative statement, must always be provided to employees who actually enroll in a self-insured health plan sponsored by the reporting large employer.
What this means to you – mandatory filing will be in early 2016 for 2015 health coverage information so employers must be collecting the necessary data now.
- Each large employer that must comply with the shared responsibility provisions of the ACA 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 employer-shared responsibility provisions of the ACA that sponsor self-insured plans must file Forms 1094-B and 1095-B to satisfy the reporting requirements.
- All reporting employers must furnish a Form 1095-C to each of its full-time employees by the January 31 following the reporting year. Any employer filing Form 1095-B must furnish a copy to the person identified as the responsible individual named on the form.
The final 2015 Forms 1094 and 1095 and accompanying instructions and FAQs can be found here:
If you have any questions regarding employer reporting obligations under the ACA or any other employee benefits matter, feel free to contact Dannae Delano or Jamie Westbrook.
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