Final Instructions for Forms 1094-1095 B and C
The IRS has released the final versions of Forms 1094-B and 1095-B, as well as Forms 1094-C and 1095-C. Simultaneously, they released the final instructions for Forms 1094/1095-B and Forms 1094/1095-C. As previously stated, these forms enforce the employer mandate as well as the individual mandate and tax credit eligibility.
Forms 1094-B and 1095-B should be completed by carriers and small employers who sponsor a self-funded group health plan.
Forms 1094-C and 1095-C should be completed by all Applicable Large Employers (ALEs). Parts I and II need to be completed by all ALEs. Part III of Form 1095-C is only to be completed by ALEs who sponsor a self-funded group health plan.
As in the draft report, the final version of Form 1095-C includes a “Plan Start Month” field. This field is optional for 2015 reporting and is anticipated to be a required field in subsequent years.
The final instructions also include a few changes and additions beyond what was originally included in the draft instructions. While most changes were adopted as is, the final instructions for Form 1095-B remove the requirement for employers to report on an integrated HRA.
The final instructions for Forms 1094/1095-C provide a few key changes as well.
- COBRA to Terminated Employees: An offer of COBRA upon termination of employment is no longer reported as an offer of coverage on line 14. Instead, ALEs would enter code 1H, no offer of coverage, on line 14 and code 2A, individual not employed, on line 16 for any month in which an offer of COBRA was made to a terminated employee. By entering 2A on line 16, employers are protected from potential penalties for those months for those former employees.
- Qualifying Offers: The final instructions add an example involving a full-time employee who receives a qualifying offer for fewer than 12 months in the calendar year. Receiving a qualifying offer, meaning an offer of affordable, minimum value coverage to the employee and MEC to family members, disqualifies employees and family members from eligibility for premium tax credits. The example illustrates that an ALE member can use the qualifying offer code (1A) on Form 1095-C 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).
- Counting Total Employees: The final instructions state that an ALE can count employees on the 12th day of each month. ALEs have five options to calculate its total employee count: first of each month, last day of each month, the 12th day of each month, the first day of the first payroll period that starts during each month, or the last day of the first payroll period that starts during each month (provided that for each month that last day falls within the calendar month in which the payroll period starts).
- HRA Reporting: As with Forms 1094/1095-B, the final instructions for Forms 1094/1095-C also explain that integrated HRAs do not need to be reported on separately.
- ALE Definition: The final instructions advise that an employee is not counted towards determining an employer’s ALE calculation if they are covered under TRICARE or Veterans’ Administration health care programs.
Assurance will continue to keep you up to date on any changes or clarifications that come out regarding the reporting requirements. If you have further questions regarding reporting, please contact your Assurance representative.