ACA Compliance: Preparing for Employer-Provided Health Insurance Reporting for 2015
IRS Forms 1095-C, 1094-B, 1095-B
Beginning with calendar year 2015, employers with 50 or more full time employees (including full time equivalent employees) are required to report to the IRS whether they offered health insurance coverage to their employees in the prior calendar year (2014), using Form 1095-C. Generally, such employers are considered “applicable large employers” by the IRS. An employee is considered full time if he or she averages 30 hours per week or 130 hours per month of service. Hours of service include straight time, overtime, vacation, sick, holiday, disability, jury duty, military duty and leave of absence.
Form 1095-C is to be filed by employers in 2016, for insurance offered in 2015. The form is intended to reflect any health insurance coverage offered to each full time employee, and to any part time employee enrolled in a self insured plan. Filing the forms is specified in IRC Section 6056 for traditionally insured employers, and Section 6055.
Form 1095-C must be sent to the IRS for each employee who was full time for any calendar month and for each part time employee who enrolled in an employer’s self-insured plan. The IRS requires a paper copy for each employee for employers reporting 50-249 covered employees. Electronic forms are required for employers reporting 250 or more covered employees. A copy must be provided to each covered employee by January 31, 2016. Employees may receive copies electronically if they agree with that process.
Self insured employers with fewer than 50 full time or full time equivalent employees enrolled in employer-sponsored health insurance will instead report to the IRS using Form 1094-B for full at any time during 2015 must be reported on Form 1095-C. Retirees who did not work for the employer during 2015 yet remained on the plan are reported using Form 1095-B. Covered dependents are also reported on these forms.
Best practices to prepare for IRS reporting include documenting offers of health insurance to full time and part time employees, tracking enrollment of employees and covered dependents, and ensuring employee and dependent names, addresses and social security numbers are accurate and updated. Also track employment status, either full time or part time, monthly.
Questions about the Affordable Care Act (ACA) may be directed to the MEA Employers’ Hotline.