SECOND OPINIONS: Forms and Instructions for ACA Health Coverage Information

September 24, 2014 (PLANSPONSOR.com) - Code section 6056, as enacted by the Affordable Care Act (ACA), requires “applicable large employer members” subject to the employer “shared responsibility” mandate Internal Revenue Code section 4980H to report to the Internal Revenue Service (IRS) information about their compliance with the mandate and any health care coverage offered to employees.
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Section 6056 also requires applicable large employer members to furnish related statements to employees so that the employees may use the statements to help determine eligibility for the ACA premium tax credit. A similar reporting requirement in Code section 6055 requires health insurance issuers, employers that sponsor self-insured plans and other providers of minimum essential coverage to report and provide statements on minimum essential coverage offered under their plans.

On August 28, 2014, the IRS released draft instructions for use by applicable large employer members to satisfy the Code section 6056 reporting requirements. (Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.) Also on August 28, 2014, the IRS released a revised form, and draft instructions, for use by sponsors of minimum essential coverage to report such coverage to the IRS and to covered individuals under the Code section 6055 requirements. (Draft Instructions to Form 1094-B, Transmittal of Health Coverage Information Returns and Form 1095-B, Health Coverage, released along with a revised draft Form 1095-B.) The IRS previously issued draft Forms 1094-B, 1095-B, 1094-C, and 1095-C on July 24, 2014.    

In this column, we answer some of the frequently asked questions we have received on these draft forms and instructions.

Are employers that are subject to the employer mandate and that sponsor a self-insured health plan for their employees required to file Form 1095-B?   

No, employers that are subject to the employer mandate and that sponsor a self-insured group health plan will report information about the coverage provided to employees in Part III of Form 1095-C instead of on Form 1095-B. Note, employers that sponsor self-insured health coverage for their employees but are not subject to the employer mandate are not required to file Forms 1094-C and 1095-C and will report details of the coverage on Form 1095-B (and file a Form 1094-B transmittal).

If an applicable large employer member is providing health coverage to employees through an insured health plan or in some other manner (e.g., through a multiemployer health plan), the issuer of the insurance or the sponsor of the multiemployer or other plan providing the coverage will provide the information about the health coverage to any enrolled employees on Form 1095-B (and file a Form 1094-B transmittal). The employer in these cases would not file a Form 1095-B or complete Part III of Form 1095-C for those employees.

What is the deadline for providing the IRS returns and employee statements? 

The forms generally must be filed with the IRS annually no later than February 28 (March 31 if filed electronically) of the year immediately following the calendar year to which the return relates. Each employee statement generally must be furnished to a full-time employee on or before January 31 of the year succeeding the calendar year to which the return relates. 

Under transition relief provided in 2013 (IRS Notice 2013-45), the first returns and statements for the 2015 calendar year will be due in early 2016. 

Do employers with 50 to 99 employees that qualify for the 2015 transition relief from the employer mandate penalties have to file Forms 1094-C and 1095-C for 2015?   

Yes. The instructions to Forms 1094-C and 1095-C specify that such an employer remains subject to the Forms 1094-C and 1095-C reporting requirements for 2015 because the IRS needs the information to determine the employee’s potential eligibility for the premium tax credit.  

Must a Form 1094-C transmittal form be filed each time an employer files Forms 1095-C? 

Yes, a Form 1094-C must be attached to any Forms 1095-C filed by an employer. The instructions state that an employer may submit multiple Forms 1094-C, each accompanied by Forms 1095-C for some of its employees, provided that, in combination, Forms 1095-C are filed for each employee for whom the employer is required to file. In addition, an employer must file a single Form 1094-C reporting aggregate employer-level data for all full-time employees of the employer and identify the form, on line 19 of Part II, as the employer’s Authoritative Transmittal.

 

Got a health-care reform question?  You can ask YOUR health-care reform legislation question online at http://www.surveymonkey.com/s/second_opinions.   

You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html.     

Contributors:   

Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C. She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare. She represents employers designing health plans as well as insurers designing new products. Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.   

Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.   

PLEASE NOTE: This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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