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1094-C and 1095-C ACA Annual Reporting
The IRS has released the final versions of Forms 1094-B, 1095-B, 1094-C, and 1095-C. This annual reporting is required for ALEs with 50 or more full-time employees for the tax year 2015. Employers are subject to penalties of up to $200 per return for non-compliance.
Annual Reporting Options
There are three options for annual reporting available to employers, based on how many eligible employees are receiving health coverage:
General Reporting Method
This method requires the greatest amount of information collection and employers must file a transmittal Form 1094-C for the company and a Form 1095-C for each employee with the IRS. Employees must also receive a copy of Form 1095-C.
Qualifying Offer Method
The Qualifying Offer Method requires less information collection and is available for employers who offer a “qualifying offer” plan that meets the minimum value requirement at a very low rate. A qualifying offer is an offer of a plan where the cost to the employee for employee‐only coverage does not exceed 9.5% of the federal poverty line divided by 12. The employer must offer the plan to all members of the employee’s family to be eligible to use this reporting method.
An ALE member using this reporting method may provide a simplified statement of coverage to an employee that received a Qualifying Offer for all 12 months of a calendar year instead of providing a Form 1095-C that is filed with the IRS.
98% Offer Method
This third method requires the least amount of information collection and is available for employers offering affordable coverage providing minimum value to at least 98% of the company’s full-time employees. The employers must also offer coverage to those employees’ dependents. The employer is not required to identify which employees regularly work full‐time hours. Instead, the employer is simply required to include those employees who may be full‐time in the report.
The ALE member must certify to the IRS it met the above requirements and is still required to file and provide Forms 1095-C for all full-time employees who were full-time for one or more months of the calendar year.
Employer Reporting Requirements
Applicable large employers (ALEs) must file a Form 1095-C for each employee who was a full-time employee for any month of the calendar year. A copy of the Form 1095-C must be issued to each full-time employee by January 31st regardless of whether the ALE offers coverage or the employee enrolls in any coverage offered.
ALEs are required to file Forms 1094-C and 1095-C with the IRS annually no later than February 28th, or March 31st if filing electronically.
Refer to the Questions and Answers about Information Reporting by Employers on Form 1094-C and 1095-C page on the IRS website for more information.
ACA Reporting Support
It is important to check with your broker or payroll provider to see if they are providing ACA reporting support. Ideally, your broker or payroll provider will use a solution that allows you to populate your Forms 1094-C and 1095-C with existing HR and payroll data. The solution should also include intelligent algorithms that will check for any errors.
If your broker or provider is not providing support for ACA reporting, it is critical to understand how to correctly fill out the forms and to check your benefits data for any errors so reporting is accurate.
Have Questions about ACA Compliance & Reporting?
Our Employer Mandate Reporting provides an overview of the different ACA reporting methods along with a handy list of FAQs to answer all of your complex questions.
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