Who, When and Where
Forms 1094-C and 1095-C are required to be completed all employers with 50 or more full time equivalent employees. This must be filed by any employer subject to the employer mandate. Form 1094-C is the Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. Form 1095-C is the Employer-Provided Health Insurance Offer and Coverage for employees. Importantly, reporting for 2015 is required even if the employer is not subject to the mandate until 2016 (generally, employers that average between 50 and 99 full-time equivalents in 2014). There is a code provided to indicate that the employer qualified for the additional transitional relief.
A form must be filed for each employee who was a full-time employee of the employer for any month of the calendar year. If a full-time employee works for more than one employer that is a member of the same aggregate applicable large employer, that employee must receive a separate Form 1095-C from each employer. Employer sponsored, self-insured health plans must also complete Form 1095-C, Part III, for any individual, including employee family members, who enrolled in the self-insured plan. In addition, self-insured plans must complete Form 1095-C Part I and II for any employee enrolled in the health plan to include whether or not the employee is a full time employee. The draft instructions include an explanation that an employee in a Limited Non-Assessment Period is not considered a full time employee during that period. They include instructions on how to go about issuing a corrected Form 1094-C and 1095-C, along with the method to which an employer may request a 30 day extension to provide Form 1095-Cs to their employees.
The return and transmittal must be filed with the IRS on or before February 28 (March 31 if filed electronically) of the year following the calendar year. For instance, the first reports will be due the beginning of 2016 for the 2015 calendar year. If the due date is on a Saturday, Sunday or legal holiday, it must be filed by the next business day. The instructions clarify that Form 1095-C must be furnished to employees on or before January 31. Statements must be furnished on paper by mail, unless the recipient has consented to receive it electronically.
The instructions provide a physical address, depending on the state, for paper returns to be sent to. If there are 250 or more returns being filed, they must be filed electronically. Employers can request a waiver from filing electronically by completing Form 8508 at least 45 days before the due date of the returns. Also employers can complete a Form 8809 by the due date of the returns to receive a 30-day extension on the returns.
The 2015 draft instructions also outline the penalties, generally up to $250 per statement with an annual cap of $3,000,000 unless the failure to provide a statement or correct statement is intentional, at which point the penalty can increase substantially.
Another clarification in the 2015 draft instructions includes multiemployer plan relief for completing line 14 on Form 1095-C. If code 2E is used on line 16, meaning the employer contributed to a multiemployer pan on behalf of the employee, they should use code 1H for line 14 for those same months.
The field “Plan Start Month” has been added to Form 1095-C, Part II. This area is optional for 2015; however, the IRS needs this field to verify if coverage was affordable at the proper time. If a non-calendar year plan qualified for transitional effective date relief and their plan did not previously meet the affordability provision, it would be beneficial to complete this field to avoid any confusion.
The 98% Offer Method is vetted out further in this set of draft instructions, clarifying individuals in a limited non-assessment period are counted when calculating the 98% offer qualification.
An individual on an unpaid leave of absence/ break in service, where they are not terminated, is still treated as an employee for reporting purposes during a break in service such a break in service. However, in situations where the employee is terminated and later rehired, they would not be treated as an employee for reporting purposes during that leave.
The transmittal, Form 1094-C, is divided into four different parts:
Part I: Applicable Large Employer Member (ALE Member)
- Line 1: Employer Name
- Line 2: Employer Identification Number
- Line 3-6: Employer’s complete address
- Line 7 and 8: Name and phone number of contact at employer
LINES 9-16 ARE FOR DESIGNATED GOVERNMENTAL ENTITY (DGE) FILING ON BEHALF OF EMPLOYER
- Name of DGE
- DGE’s Employer Identification Number
- DGE’s complete address
- DGE contact information
- Line 17: Reserved for future use
- Line 18: Total number of Forms 1095-C submitted with Form 1094-C transmittal
- Line 19: If using Form 1094-C as the Authoritative Transmittal to report the employer level data, this box should be checked.
Part II: (ALE Member Information)
- Line 20: Number of Form 1095-C being filed, including those being filed with another transmittal for the employer or for non-full-time employees enrolled in a self-insured health plan.
- Line 21: This is filled out if the employer was part of an Aggregated ALE Group.
- Line 22: Verification of eligibility requirements and verification that a qualifying offer is being made using designated indicator codes. This section provides for specific indicator codes based on what type of offer was made. In addition, this section is where an employer would indicate if it qualified and is taking advantage of transitional relief.
Part III: ALE Member Information-Monthly
This section is divided into columns and covers lines 23-35.
- Line 23 has been changed to allow for column (b) to be filled in under “All 12 Months”
- Column (a): Minimum Essential Coverage (MEC) Indicator: Here employers will enter if they offered MEC to at least 95% of their full-time employees each month. If not, they will indicate if they qualified for transitional relief for certain months.
- Column (b): Full- Time Employee Count for ALE Member: Here employers will enter the number of full time employees for each month. Employees who are in an initial measurement period or waiting period should not be included as a full-time employee for that month.
- Column (c): Total Employee Count for ALE Member: Enter the total number of employees, both full-time and non-full time for each calendar month.
- Column (d): Aggregated Group Indicator: If an employer checked “yes” on line 21, it would indicate here which months it was a member of an Aggregated ALE Group.
- Column (e): Section 4980H Transition Relief Indicator: The employer will verify what transitional relief they qualified for if they stated they qualified for relief on line 22.
Part IV: Other ALE Member of Aggregate ALE Group
- If the employer checked “yes” on line 21, they need to list the name end EIN of the other ALE Group Members.
Form 1095-C is divided into three parts, however, Part I is divided into two parts. The information required for each part is as follows:
Part I: Employee
- Line 1: Name of employee
- Line 2: Employee social security number (no dashes)
- Lines 3-6: Employee’s complete address
Part I: Applicable Large Employer Member
- Line 7: Name of employer
- Line 8: Employer identification number (including the dash)
- Line 9 and 11-13: Employer’s complete address
- Line 10: Employer contact phone number
Part II: Employee Offer and Coverage
- The field “Plan Start Month” has been added. This is optional for 2015.
- Line 14: For each calendar month, the employer must list the appropriate code (listed in the instructions) as to the offer of coverage to the employee for each month.
- Line 15: This is where the contribution amount for the lowest-cost monthly premium for self-only minimum essential coverage is listed.
- Line 16: Indicator codes are provided to identify safe harbor used and other relief available to employers.
Part III- Covered Individuals: Completed ONLY for self-funded health plans
This part covers lines 17-22 and is divided into columns.
- Column (a): Name of each covered individual
- Column (b): Social security number for each covered individual (without dashes)
- Column (c): Enter date of birth if Column (b) is left blank.
- Column (d): Check this box if the individual was covered for at least one day all 12 months.
- Column (e): If not covered at least one day all 12 months, indicate as appropriate which months the individual was covered for at least one day.
Forms 1094-C and 1095-C need to be completed by all employers with 50 or more full-time equivalent employees. Part III of Form 1095-C must only be completed by employers with a self-funded.