Employer Reporting of Health Coverage for 2015 – New IRS Forms 1094 and 1095

Employer Reporting of Health Coverage for 2015 – New IRS Forms 1094 and 1095

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Author: John T. Murray, CPA, Tax Senior Manager

The Affordable Care Act employer mandate imposes significant information reporting requirements on employers for the year ending 2015 related to healthcare coverage.  The information reporting is similar to other reporting requirements such as W-2s and 1099s and must be filed in early 2016.  The summary below provides general information on the new forms.

IRS Forms for Applicable Large Employers (ALEs)

For employers with 50 or more full-time employees (including full-time equivalent employees (FTEs)) in the prior year IRC §6056 requires IRS Forms 1094-C and 1095-C to be used to report information about health coverage and enrollment in health coverage for their employees.  The employer will use Form 1094-C to report summary information for each employee and file a copy of Form 1095-C with the IRS. A separate Form 1095-C is used to report information to each employee regarding his/ her coverage. In addition, Forms 1094-C and 1095-C are used in determining whether an employer owes payments under the employer shared responsibility provisions.  Even if an ALE does not provide minimum essential coverage (MEC), Forms 1094-C and 1095-C must be filed.

IRS Form 1094-C is the employer’s Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns and accompanies copies of the 1095-C.

IRS Form 1095-C is the Employer-Provided Health Insurance Offer and Coverage form and is required if the employer has an employer sponsored insurance plan or self-insured health plan.  This form is prepared for each applicable employee.  If the employer offers health coverage through another provider then the employer completes Form 1095-C Parts I and II and the issuer of the insurance should provide information directly to the employee regarding the coverage.  In a self-insured plan model, the employer completes Form 1095-C Parts I, II and III. There are special reporting requirements if the employee is/ is not a full time employee.

IRS Forms for Small Employers

For small employers with less than 50 FTEs in the prior year who provide minimum essential coverage (MEC), the IRS requires Form 1094-B and Form 1095-B to be completed.  These forms are used to report certain information to the IRS and employees who have MEC and therefore are not liable for the individual shared responsibility penalty payment. Small employers are not subject to the Employer Shared Responsibility provision.  Generally the health insurance carrier will file Form 1094-B and Form 1095-B for small employers.  If a small employer does not provide any health coverage, no filing is required.

IRS Form 1094-B is the Transmittal of Health Coverage Information Returns form that accompanies IRS Forms 1095-B.

IRS Form 1095-B is Heath Coverage form used to report to the IRS and to covered individuals who have Minimum Essential Coverage (MEC) and not liable for the individual shared responsibility penalty payment.  The 1095-B is provided to the IRS and given to the covered employee.

About the Author

John is a member of the Firm’s Financial Services and Emerging Business and Technology industry teams with over ten years of experience in both the private and public accounting practice areas. He applies his experience to provide insights and identify opportunities for closely-held businesses in the real estate, healthcare, private equity, and government contracting industries. He provides ongoing budgeting, forecasting, cash management, and compensation planning for many of his clients. John also applies his expertise and knowledge in structuring transactions and reviewing proposed acquisitions in order to minimize the tax consequences for his clients.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.


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