ACA Pathways: IRS Releases Final ACA Employer Reporting Forms and Instructions
February 13, 2015
The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees.
Draft versions of the forms and related instructions that employers may use to report under Sections 6055 and 6056 for 2014 were released last year. Forms 1095-B and 1095-C are information returns, which will also serve as a statement to individuals, and Forms 1094-B and 1094-C are transmittal forms that will be used to send the information returns to the IRS. The “C forms” will be used by applicable large employers (ALEs) subject to the employer shared responsibility provisions of the ACA (commonly referred to as “play or pay”), and the “B forms” will be used by other coverage providers.
On February 8, 2015, the Internal Revenue Service (IRS) released final versions of these forms and instructions. These forms are not required to be filed for 2014, but reporting entities may voluntarily file them in 2015 for 2014 coverage. On the next day, the IRS also issued Publication 5196 to assist employers prepare for reporting in 2016, which is available at http://www.irs.gov/pub/irs-pdf/p5196.pdf.
Forms and instructions for 2015 reporting have not yet been released and may contain some changes from these 2014 versions.
Changes in Final Forms
The final versions of the forms do not differ significantly from the draft versions. In general, the final instructions were edited to clarify existing requirements. These clarifications include the following:
Reporting Non-employee Enrollment Information. To satisfy Code Section 6055’s reporting requirements, ALEs who sponsor self-insured health coverage have an option to report information about nonemployees (such as partners, nonemployee directors, retirees or nonemployee COBRA beneficiaries) who are enrolled for coverage (and their family members) using either Forms 1094-B and 1095-B or Form 1095-C, Part III (under the draft instructions, they were required to use Forms 1094-B and 1095-B).
Alternative Reporting Options. The final instructions for Forms 1094-C and 1095-C also made several changes to the alternative methods of reporting under Code Section 6056, including:
- A Form 1095-C is not required to be filed with respect to individuals who were not employees of the employer or who were in a limited non-assessment period for every month of the calendar year. However, for the months in which the employee was an employee of the ALE, he or she would be included in the total employee count reported on Form 1094-C, Part III, Column (c). Also, if the employee enrolled in self-insured employer-sponsored coverage during the limited non-assessment period, the employer must file a Form 1095-C for the employee in order to report coverage information for the year.
- For purposes of Form 1095-C, Part III, if spouses (or employee and dependents) are employed by the same ALE, and one employee enrolled in a self-insured coverage option that also covered the other employee(s) (for example, family coverage that provided coverage to the other employee spouse and employee dependent child), the enrollment information should be reflected only on the Form 1095-C for the employee who enrolled in the coverage (but it would report the other employee family members as covered individuals).
ALE Member Information.
- For purposes of reporting under the Qualifying Offer Method (and the Qualifying Offer Method Transition Relief for 2015), an offer to a spouse includes an offer to a spouse that is subject to a reasonable, objective condition, regardless of whether the spouse meets the condition. For example, an offer to a spouse that is available only if the spouse certifies that he or she does not have access to health coverage from another employer is treated as an offer of coverage to the spouse for reporting purposes (note that this treatment is for reporting purposes only, and generally will not affect the spouse’s eligibility for the premium tax credit if the spouse did not meet the condition and therefore did not have an actual offer of coverage).
- The simplified statements that may be furnished to employees under the Qualifying Offer Method (and the Qualifying Offer Method Transition Relief for 2015) in lieu of a copy of the Form 1095-C must now include a statement that directs the employee to IRS Publication 974, Premium Tax Credit (PTC) (currently in draft form) to obtain additional information regarding eligibility for the premium tax credit.
- A simplified statement cannot be furnished to employees enrolled in self-insured coverage without also furnishing a copy of the Form 1095-C that includes the information on Part III of the Form 1095-C.
- To use the 98 Percent Offer Method under Form 1094-C, Line 22, the coverage offer must also extend to those employees’ dependents (in addition to the employee). For this purpose, the term “dependent” is defined to include an employee’s child, but does not include a spouse.
- A valid Employer Identification Number (EIN) is required in order to file the Forms 1094 and 1095-Cs with the IRS.
- The EIN may be truncated on statements furnished to employees or individuals, but not on any forms filed with the IRS (previously, truncation of EINs was not allowed on any forms).
- A country code should be included with the employee’s address in Part I of Form 1095-C.
- When determining the total employee count for purposes of Form 1094-C, Part III, Column (c), an ALE may now choose to use either the first or last day of the first payroll period that starts during each month, or the first or last day of each month.
Final forms and instructions
The following forms and instructions are available for use to comply with ACA’s reporting and disclosure requirements:
Please also refer to our ACA Pathways dated September 16, 2014 that discusses the draft employer reporting instructions and forms here and don’t forget to attend our upcoming webinar “The Nuts & Bolts of Required Employer Reporting for IRS Code Sections 6055 & 6056” on February 18th.
For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:
This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.
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