ISSUED 10/21/2020

 

TABLE OF CONTENTS

Overview

How do I know whether to complete the B forms or C forms?

All applicable large employers (ALE) must file Forms 1094-C and 1095-C with the IRS and furnish a copy of the 1095-C to all full-time employees. The insurance carrier for a fully insured plan must complete Forms 1094-B and 1095-B. Generally,  only employers that are non-ALEs with a self-insured plan will complete Forms 1094-B and 1095-B. Some employers must complete and distribute the 1095-B

if it is a non-ALE (applicable large employer) self-insured plan. The IRS provided additional relief to entities required to distribute Form

1095-B. For these two groups reporting on the B forms, the IRS stated that it will not assess a penalty for failure to distribute Form 1095- B to participants in cases  where  the reporting entity meets the following requirements:

1.      Prominently place  a notice on its website with an email address, physical address, and telephone number, where  individuals can contact the entity to request a copy of the 1095-B; and

2.     The reporting entity provides a copy of the 1095-B within 30 days of the request.

 

 

What is the deadline for filing and furnishing the forms?

 

To IRS: February  28 or April 1 (electronically)

 

To Employee: January 31 (Extended to March 2, 2021)

 

 

Form 1094-C

What is an “authoritative transmittal?”

 

If you have only one  Form 1094-C, that Form 1094-C must report aggregate employer-level data for the ALE Member and be the Authoritative Transmittal. If multiple  Forms 1094-C are being filed for an ALE Member so that all full-time employees’ Forms 1095-C are not attached to a single Form 1094-C transmittal, one of the Forms 1094-C must report aggregate employer-level data for the ALE Member and be the Authoritative Transmittal.

 

 

What is an Aggregate ALE Group member?

 

Companies that are part of a controlled group are an ALE member in the aggregate ALE group. Each ALE member must complete the

Form 1094-C and 1095-C.

 

 

What should  I check under “certifications of eligibility”?

 

A. Qualifying Offer Method – the ALE Member can certify that it made a Qualifying Offer (affordable based on FPL and minimum value)

to one or more of its full-time employees for all months during the year in which the employee was a full-time employee.

 

 

D. 98% Offer Method – the employer can certify that taking into account all months during which the individuals were employees of the ALE Member and were not in a Limited Non-Assessment Period,  the ALE Member offered affordable health coverage providing minimum value to at least 98% of its employees for whom it is filing a Form 1095-C, and offered minimum essential coverage to those employees’ dependents.

 

 

How do I complete Part III(a)?

 

Check “yes”  for the applicable month or all 12 months if you offered minimum essential coverage to at least 95% of your full-time employees.


 

 

What is the difference between Part III(b) and Part III(c)?

 

Part III (b): Enter full-time employee count

 

Part III (c): Enter total employee count  (includes  part-time employees and all others)

 

 

What should  I enter in Part IV?

 

Each aggregate ALE member must cross-reference the name and EIN of all other entities in the controlled group.


 

Form 1095-C

 

Which code should  I enter on Line 14?

 

1A        Minimum essential coverage offered: Minimum Value to Employee Affordable Based  on FPL To Spouse and Dependent

 

1B         Minimum essential coverage offered: Minimum Value to Employee Affordable or Unaffordable To Employee Only

 

1C         Minimum essential coverage offered: Minimum Value to Employee Affordable or Unaffordable To Dependent (not Spouse)

 

1D        Minimum essential coverage offered: Minimum Value to Employee Affordable or Unaffordable To Spouse (not  Dependent)

 

1E         Minimum essential coverage offered: Minimum Value to Employee Affordable or Unaffordable To Spouse and Dependent

 

1F         Minimum essential coverage offered: NOT Minimum Value Affordable or Unaffordable To Employee, Spouse, and/or

Dependent

 

1G        Self-insured coverage offered: To Non-Employee or Former  Employee for Entire Calendar Year

 

1H        No offer of coverage: For the entire  month; or For part of the month

 

1J          Minimum essential coverage offered: Minimum Value to Employee Affordable or Unaffordable To Spouse Conditionally

 

1K        Minimum essential coverage offered: Minimum Value to Employee Affordable or Unaffordable To Spouse Conditionally To

Dependent

 

1L         Individual coverage HRA offered: To Employee Affordable Based  on Primary Residence Zip Code

 

1M        Individual coverage HRA offered: To Employee and Dependent Affordable Based  on Primary Residence Zip Code

 

1N        Individual coverage HRA offered: To Employee, Spouse and Dependent Affordable Based  on Primary Residence Zip Code

 

1O        Individual coverage HRA offered: To Employee Affordable Based  on Primary Employment Site Zip Code

 

1P         Individual coverage HRA offered: To Employee and Dependent Affordable Based  on Primary Employment Site Zip Code

 

1Q        Individual coverage HRA offered: To Employee, Spouse and Dependent Affordable Based  on Primary Employment Site Zip

Code

 

1R         Individual coverage HRA Offered: Unaffordable to employee, employee and spouse, employee and dependent, or employee, spouse and dependent

1S         Individual coverage HRA offered: To Non-Full-time Employee

 

 

What is the difference between code 1A and code 1E?

 

An offer of coverage under code 1A must be affordable based on the federal poverty line. Code 1E may be used for coverage that is affordable under any of the affordability safe harbors, or unaffordable.


What code should  I enter on Line 16?

 

2A        Employee not employed any day of the month

 

2B         Employee not a full-time employee or was full-time only part of the month

 

2C         Employee enrolled in coverage every day of the month

 

2D        Employee in a waiting period, measurement period, or first month of employment with no waiting period

 

2E         Employee offered union coverage on behalf  of employer

 

2F         Employee waived and coverage affordable based on W-2 safe harbor

 

2G        Employee waived and coverage affordable based on federal poverty  line safe harbor

 

2H         Employee waived and coverage affordable based on rate of pay safe harbor



Can I use the “All 12 months”  Box for the cost of coverage on Line 15?

 

Only use this Box if the cost was the exact same for all 12 months. If cost changes during the plan year, enter the applicable cost for each month. Non-calendar plan years typically cannot use the all 12 months box.

 

 

How do I report coverage that terminates on date the employee’s employment ends mid-month?

 

The employer cannot enter 2C on Line 16 because the employee was not enrolled in coverage for every day of the month. Alternatively, the employer should enter 2B to indicate that the employee was not a full-time employee for the entire  month.

 

 

How do I report an employee in an initial measurement period for the entire year?

 

Employers should only complete the forms for its full-time employees. Until the employee completes the measurement period, no status is assigned so no reporting is required.

 

 

Should I complete the forms for non-employees?

 

The employer shared responsibility provision does not apply to non-employees, such as independent contractors, owners  and other non-employees. There is no reporting requirement for non-employees under section 6056. However,  under section 6055, self-insured plans must report on any covered non-employees.

 

 

How do I report an offer of COBRA or retiree coverage?

 

Terminated During Reporting Year: Report  as no offer of coverage – code 1H

 

Reduction in Hours During Reporting Year: Report  as an offer of coverage – typically code 1B, 1C, 1D, or 1E On Self-Insured  COBRA All of Reporting Year: Report  as an offer of coverage – code 1G

 

 

Do I need to complete Part III of the 1095-C?

 

Self-Insured  Plan: Yes; Fully Insured  Plan: No


 

How do I complete 1095-C Part III(e)? 

Check all months that the employee, employee’s spouse, or employee’s dependent was covered for at least one  day of the month.

 

 

How do I report a spouse or dependent covered on my self-insured plan when the employee is not receiving a 1095-C?

 

To report coverage for a spouse or dependent only, complete Forms 1094-B and 1095-B and check all months that the individual was covered for at least one day of the month.

 

 

Filing

 

Am I required to file electronically?

 

Employers submitting 250 or more forms must file electronically. Employers filing electronically must do so via the Affordable Care Act  Information Returns (AIR) System.

 

 

What are the penalties if I do not complete the forms?

 

Failure to File Correct Return: $270/return Failure to Furnish Correct Return: $270/return Intentional Disregard: $540/return

 

 

Did the IRS create more detailed instructions for how to complete the forms?

 

Yes, annually the IRS issues updated forms and Instructions for Forms 1094-C and 1095-C and Instructions for Forms 1094-B and 1095-B.