Affordable Care Act (ACA) 1094/1095 Reporting Guidelines
Affordable Care Act (ACA) requires employers to report information to the IRS regarding individual and employer responsibilities under the ACA. The reporting includes details on individual responsibility, employer responsibility, exemptions, and reporting requirements for different types of employers. Employers sponsoring self-funded plans, regardless of size, have specific reporting obligations. Different forms are used based on the number of full-time employees and whether the employer is self-funded or insured. Understanding these reporting requirements is essential for compliance with the ACA regulations.
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Affordable Care Act (ACA) 1094 / 1095 REPORTING Roger Cowan, Administrative Procedures Manager 1
1094 / 1095 REPORTING IRS Reporting to assist with both Individual and Employer Responsibility under ACA Page 2
INDIVIDUAL RESPONSIBILITY Provides IRS information about your Employees and their Dependents to cross match with Market Place Subsidies. If Employer Minimum Essential Coverage (MEC) coverage is available and offered, the subsidy is not available. Page 3
EMPLOYER RESPONSIBILITY Employer Responsibility proves that the Employer has offered MEC and affordable Minimum Value Coverage to Full-Time Employees and their Dependents. Page 4
Not required for H.S.A., Flex, HRA, wellness plans or excepted benefits. Page 5
WHO MUST REPORT? Any Employers who sponsor Self-Funded Plans regardless of size. Different forms for Self-Funded Employers with less than 50 Full-Time Employees and Self-Funded Employers with more than 50 Full-Time Employees . Group Health Insurance Carriers. Insurance carrier only provides part of the reporting. Insured large Employer must submit part of Form 1095 to IRS.
Self-Funded Employers with less than 50 Full-Time Employees, and Insurance Carriers will use Form 1094-B and Form 1095-B. Page 7
Self-Funded Applicable Large Employers (ALE) with 50 or more Full-Time Employees will use Forms 1094-C and 1095-C. Insured Applicable Large Employers will have to complete Sections I and II of Form 1095-C Page 8
MULTIPLE EMPLOYER PLANS Multiple employer Welfare Arrangements (MEWAs) and similar arrangements. Each employer is responsible for its own reporting. Multi employer union plans. Union or employee organization is responsible for reporting as a single entity. Control groups under PPACA and IRS rules. There are two options. Either each employer in the control group can file separately, or one employer in the control group ( parent company for example) can file one return for all, but must designate it is the responsible employer on the form. Page 9
WHEN ARE REPORTS DUE? Form 1095-B or Form 1095-C must be provided to all covered and non-covered Full time Employees on or before January 31, 2016. Form 1095-B or Form 1095-C can be provided together with the Employee s W-2 Form with certain exceptions regarding electronic distribution. Page 10
Form 1094-B or Form 1094-C are IRS transmittal forms due on or before February 29, 2016 if submitted in paper form, or by March 31, 2016 if submitted electronically. Employers who issue more than 250 Form 1095-C s must file electronically. Page 11
Form 1095-B and Form 1095-C are Individual forms to be provided to all covered and non- covered Full time Employees. Form 1095-B is for non-ALE Self-Funded and Insured Plans. Form 1095-C is for ALE Self-Funded Plans, and Sections I and II must be completed by ALE sponsoring an insured plan. Page 12
Individual (1095) reporting includes retirees and COBRA Reported in Covered Individual section, not Employee section of 1095-C Reported in responsible individual section of 1095-B Page 21
1095-C CODES FOR SECTION II Part II. Employer Offer and Coverage, Lines 14-16 Line 14. The codes listed below are for line 14 and describe the coverage offered by the employer offered employees and eligible dependents, if any. Page 22
1A. Minimum essential coverage providing minimum value offered to the employee with an employee contribution for self-only coverage equal to or less than $1,108.65 (9.5% of the 48 contiguous states single federal poverty line) and minimum essential coverage offered to eligible dependents (referred to as a Qualifying Offer). This code may be used to report for specific months for which a Qualify Offer was made. Page 23
1B. Minimum essential coverage providing minimum value offered to the employee and minimum essential coverage NOT offered to eligible dependents. 1C. Minimum essential coverage providing minimum value offered to employee and minimum essential coverage offered to dependents except spouses. 1D. Minimum essential coverage providing minimum value offered to employee and minimum essential coverage offered to spouses but NOT dependents. Page 24
1E. Minimum essential coverage providing minimum value offered to the employee and minimum essential coverage offered to dependents including spouses. 1F. Minimum essential coverage NOT providing minimum value offered to employee, and spouses and dependents. 1G. Employee was NOT a full-time employee for any month of the calendar year but were enrolled in self-insured employer-sponsored coverage for one or more months of the calendar year. This code will be entered in the All 12 Months box on line 14. Page 25
1H. No offer of coverage 1I. The employer claimed Qualifying Offer Transition Relief for 2015 and for at least one month of the year. Note that employers must provided a contact number with the employer where the employee can request further information about the health coverage, offered (see Line 10 Form 1095-C). Page 26
Line 15. This line reports the employee share of the lowest-cost monthly premium for self-only minimum essential coverage providing minimum value offered to the employee. Line 15 will show an amount only if code 1B, 1C, 1D, or 1E is entered on line 14. If the employee was not required to pay any amount for single coverage, this line will report a $0.00 for the amount. Page 27
Line 16. 4980H Safe Harbors Line 16 Codes are shown below 2A. Employee not employed during the month. Enter code 2A if the employee was not employed on any day of the calendar month. Do not use code 2A for a month if the individual was an employee of the employer on any day of the calendar month. Do not use code 2A for the month during which an employee terminates employment with the employer. Page 28
2B. Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in minimum essential coverage, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month). Also use this code for January 2015 if the employee was offered health coverage no later than the first day of the first payroll period that begins in January 2015 and the coverage offered was affordable for purposes of the employer shared responsibility provisions under section 4980H and provided minimum value. Page 29
2C. Employee enrolled in coverage offered. Enter code 2C for any month in which the employee enrolled in health coverage offered by the employer for each day of the month, regardless of whether any other code in Code Series 2 might also apply (for example, the code for a section 4980H affordability safe harbor). Page 30
2D. Employee in a section 4980H(b) Limited Non- Assessment Period. Enter code 2D for any month during which an employee is in a Limited Non-Assessment Period for section 4980H(b). If an employee is in an initial measurement period, enter code 2D (employee in a section 4980H(b) Limited Non- Assessment Period) for the month, and not code 2B (employee not a full-time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the employer is also eligible for the multiemployer interim rule relief for the month code 2E, enter code 2E (multiemployer interim rule relief ) and not code 2D (employee in a Limited Non-Assessment Period). Page 31
2E. Multiemployer interim rule relief. Enter code 2E for any month for which the multiemployer interim guidance applies for the employee. This relief is described under Offer of Health Coverage in the Definitions section of these instructions. 2F. Section 4980H affordability Form W-2 safe harbor. Enter code 2F if the employer used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an employer uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage. Page 32
2G. Section 4980H affordability federal poverty line safe harbor. Enter code 2G if the employer used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). 2H. Section 4980H affordability rate of pay safe harbor. Enter code 2H if the employer used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). Page 33
Note. Codes 2F through 2H: Although employers may use the section 4980H affordability safe harbors to determine affordability for purposes of the multiemployer interim guidance, an employer eligible for the relief provided in the multiemployer interim guidance for a month for an employee should enter code 2E (multiemployer interim rule relief), and not a code for the section 4980H affordability safe harbors (codes 2F, 2G, or 2H). Page 34
2I.Non-calendar year transition relief applies to this employee. Enter code 2I if non-calendar year transition relief for section 4982H(b) applies to this employee for the month. See the instruction later under Section 4980H Transition Relief for 2015 and 2015 Section 4980H(b) Transition Relief for Employers with Non-Calendar Year Plans (Form 1095-C, line 16, code 2I), for a description of this relief. Page 35
LIMITED NON-ASSESSEMENT PERIODS First Year as ALE Period. January through March of the first calendar year in which an employer is an ALE, but only for an employee who was not offered health coverage by the employer at any point during the prior calendar year. For this purpose, 2015 is not the first year an employer is an ALE, if that employer was an ALE in 2014 (notwithstanding that transition relief provides that no employer shared responsibility payments under section 4980H will apply for 2014 for any employer). Page 36
Waiting Period under the Monthly Measurement Method. If an employer is using the monthly measurement method to determine whether an employee is a full-time employee, the period beginning with the first full calendar month in which the employee is first otherwise (but for completion of the waiting period) eligible for an offer of health coverage and ending no later than two full calendar months after the end of that first calendar month. Page 37
Waiting Period under the Look-Back Measurement Method. If an employer is using the look-back measurement method to determine whether an employee is a full-time employee and the employee is reasonably expected to be a full-time employee at his or her start date, the period beginning on the employee s start date and ending not later than the end of the employee s third full calendar month of employment. Page 38
Initial Measurement Period and Associated Administrative Period under the Look-Back Measurement Method. If an employer is using the look-back measurement method to determine whether a new employee is a full-time employee, and the employee is a variable hour employee, seasonal employee or part-time employee, the initial measurement period for that employee and the administrative period immediately following the end of the initial measurement period. Page 39
Period Following Change in Status that Occurs During Initial Measurement Period Under the Look-Back Measurement Method. If an employer is using the look-back measurement method to determine whether a new employee is a full-time employee, and, as of the employee s start date, the employee is a variable hour employee, seasonal employee or part-time employee, but, during the initial measurement period, the employee has a change in employment status such that, if the employee had begun employment in the new position or status, the employee would have reasonably been expected to be a full-time employee, the period beginning on the date of the employee s change in employment status and ending not later than the end of the third full calendar month following the change in employment status. If the employee is a full-time employee based on the initial measurement period and the associated stability period starts sooner than the end of the third full calendar month following the change in employment status, this Limited Non-Assessment Period ends on the day before the first day of that associated stability period. Page 40
First Calendar Month of Employment. If the employees first day of employment is a day other than the first day of the calendar month, then the employee s first calendar month of employment is a Limited Non-Assessment Period. Page 41
KNOW YOUR FORMS: Page 42
Type of Entity B Form Filing C Form Filing Small employer who self-funds group health coverage Small employer who sponsors insured coverage Large employer who sponsors insured coverage Yes to report MEC provided under group health plan No the insurer will have the 6055 reporting requirement No the insurer will have the 6055 reporting requirement No not an ALE, so not subject to 4980H, so not subject to 6056 No not an ALE, so not subject to 4980H, so not subject to 6056 Yes an ALE, so subject to 4980H, so subject to 6056 Page 43
Type of Entity Insurer of employer- sponsored group health coverage B FORM FILING Yes the insurer will have the 6055 reporting requirement Maybe employer has option of reporting MEC provided to non- employees on either B or C Forms C FORM FILING No insurers don t report for ALEs under 6056 Large employer who self-funds group health coverage (and provides coverage to certain non- employees) Yes subject to mandatory combined reporting so 6055 and 6056 reporting for employees and FTE s will be on C Forms Page 44
1095-B Responsible Party = employee/COBRA Participant or retiree, not employer of plan sponsor. Page 45
1095-C All ALE s must fill out at least Part Insured ALE sections I and II only Self-funded ALE all of 1095-C Page 46
1095-B and 1095-C delivery to employee by January 31 of following year, i.e., January 31, 2016 for 2015 calendar year. Page 47
Delivery to employee responsible individual must be paper hard copy unless employee affirmatively consents to electronic. Page 48
1095-B / 1095-C to employee or responsible individual can truncate SSN to last 4 digits but entire SSN is required on copy to the IRS. Page 49
1095 reporting includes retirees and COBRA Reported in Covered Individual section, not employee section of 1095-C Reported as responsible individual section of 1095-B Page 50
