On August 28, 2014, the Internal Revenue Service (IRS) released draft instructions for the reporting forms that will be used to report on individual and employer mandates. The draft forms were released on July 24, 2014. The instructions and forms will be used by applicable large employers, insurers and employers with self-funded plans. The IRS has posted the draft forms for information only, and will post final versions for actual filing at a later date.
The first reporting is required in early 2016 for the 2015 calendar year. Employers will need to be ready to gather the necessary data, starting in January of 2015.
The drafts include general instructions and provide an overview of why the forms are required. They also cover basic information including:
- Who must file
- When to file
- Where to file
- How to file
- Specific line by line instructions
- Transitional relief for 2015
There are two forms required for each set of information being reported, a transmittal form that serves as a cover letter as well as forms providing data on the individual or employer mandate.
In general, an employer with 50 or more full-time employees (including full-time equivalent employees) during the prior calendar year is subject to the employer shared responsibility provisions. Plan sponsors that are employers subject to the employer shared responsibility provisions must report the coverage on Form 1095-C and other plan sponsors (such as sponsors of multiemployer plans) report the coverage on Form 1095-B.
The returns and transmittal forms must be filed with the IRS on or before February 28 (March 31 if filed electronically) of the year following the calendar year of coverage.
Forms 1094-B and 1095-B
Form 1095-B is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment. Minimum essential coverage includes government-sponsored programs, eligible employer-sponsored plans, individual market plans, and miscellaneous coverage designated by the Department of Health and Human Services. Minimum essential coverage does not include coverage consisting solely of excepted benefits. Excepted benefits include such things as vision and dental coverage not part of a comprehensive health insurance plan, workers’ compensation coverage, and coverage limited to a specified disease or illness.
Plan sponsors of self-funded employer coverage include:
- Each participating employer (for its own employees) in a plan or arrangement established or maintained by more than one employer;
- The association, committee, joint board of trustees, or similar group of representatives who establish or maintain a multiemployer plan;
- The employee organization for a plan or arrangement maintained solely by an employee organization; and
- Each participating employer (for its own employees) for a plan maintained by a Multiple Employer Welfare Arrangement.
Filers of 250 or more information returns (Forms 1095-B) must file Forms 1094-B and 1095-B electronically. Filers of fewer than 250 returns may file electronically or on paper.
Filers of Form 1095-B must furnish a copy to the person identified as the responsible individual named on the form on or before January 31 of the year following the calendar year the coverage is provided.
Forms 1094-C and 1095-C
Employers with 50 or more full-time employees (including full-time equivalent employees) use Forms 1094-C and 1095-C to report the information required under sections 6055 and 6056 about offers of health coverage and enrollment in health coverage for their employees. Form 1094-C must be used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. In addition, Forms 1094-C and 1095-C are used in determining whether an employer owes payments under the employer shared responsibility provisions under section 4980H. Form 1095-C is also used in determining eligibility of employees for premium tax credits.
Employers that offer employer-sponsored self-funded coverage also use Form 1095-C to report information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage under the employer plan and therefore are not liable for the individual shared responsibility payments.
The employer is required to file Forms 1094-C and 1095-C with the IRS and to furnish a copy of Form 1095-C to the employee.
An employer subject to the employer shared responsibility provisions must file one or more Forms 1094-C and must file a Form 1095-C for each employee who was a full-time employee of the employer for any month of the calendar year. An employer that provides health coverage through an employer-sponsored self-funded health plan must also complete Form 1095-C, Part III for any individual who enrolled in the self-funded health plan. If an employer offers both fully insured and self-funded options, the employer must complete Form 1095-C, Part III only for the employees who enrolled in the self-funded option.
Filers of 250 or more information returns must file the returns electronically.
An employer must furnish a Form 1095-C to each of its full-time employees by January 31 of the year following the year to which the Form 1095-C relates.