A roundup of final ACA reporting forms and instructions
On Sept. 16, 2015, the IRS finalized these ACA coverage reporting forms and instructions:
- 2015 Instructions for Forms 1094-C and 1095-C;
- 2015 Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns;
- 2015 Form 1095-C Employer-Provided Health Insurance Offer and Coverage;
- 2015 Instructions for Forms 1094-B and 1095-B;
- 2015 Form 1094-B Transmittal of Health Coverage Information Returns;
- 2015 Form 1095-B Health Coverage.
The new instructions clarify a couple of key areas that will simplify how employers file under IRS 6055 and 6056. We have listed these notable changes below:
Prior to this latest guidance, reporting for COBRA participants for self-funded employers posed some significant challenges for your clients. Employers were required to designate different offers of coverage based on the type of Cobra election rather than the employer offer of coverage (for example 1B-Single, 1D- Employee/Spouse) The latest guidance from the IRS essentially treats COBRA employees as a terminated employee making the data collection and reporting process much easier:
"An offer of COBRA continuation coverage that is made to a former employee upon termination of employment should not be reported as an offer of coverage on line 14. For a terminated employee, code 1H (No offer of coverage) should be entered for any month for which the offer of COBRA continuation coverage applies.”
Also see: "How to help clients avoid ACA filing penalties."
What you need to consider: In the past, our instructions indicated the need to create multiple classes for each COBRA election and include plan costs. Going forward, you can identify those on COBRA or retired for the partial year (1H/2A) and one for a full year COBRA (1G/2A) for self-insured plans.
New clarifications in the area of HRA plans only require the completion of part III of the 1095-C form only when the HRA is not integrated with the major medical plan.
"An ALE Member with a self-insured major medical plan and a health reimbursement arrangement (HRA) is required to report the coverage of an individual enrolled in both types of minimum essential coverage in Part III under only one of the arrangements. An ALE Member with an insured major medical plan and an HRA is not required to report in Part III HRA coverage of an individual if the individual is eligible for the HRA because the individual enrolled in the insured major medical plan. An ALE Member with an HRA must report coverage under the HRA in Part III for any individual who is not enrolled in a major medical plan of the ALE Member (for example if the individual is enrolled in a group health plan of another employer (such as spousal coverage)).”
What you need to consider: If you have employees enrolled in a non-integrated HRA plan and others enrolled in a fully insured plan you will need to class out each group into a fully insured and self-insured class. This will allow HCM file to provide part III information only for the HRA plan.
Employees in waiting periods do not need to file a 1095-C- employees at any part of the year that never make it out of their waiting periods do not need to file a 1095-C but still need to be counted on the 1094-C. The IRS Tip in the 9/16 release reads:
"An employer need not file a Form 1095-C for an individual who for each month of a calendar year is either not an employee of the employer or is an employee in a Limited Non-Assessment Period. However, for the months in which the employee was an employee of the employer, such an employee would be included in the total employee count reported on Form 1094-C, Part III, Column (c). Also, if during the Limited Non-Assessment Period the employee enrolled in coverage under a self-insured employer-sponsored plan, the employer must file a Form 1095-C for the employee to report coverage information for the year."
Also see: "Why get involved in ACA reporting?"
What you need to consider: Identify non-eligible employees and make sure they are assigned to the correct EIN on form 1094-C part III and form 1095-C. This class can include employees that never make it out of the waiting period or part time non eligible employees.
Other clarifications worth briefly noting:
- Qualifying Offer transition relief reporting to employees simplified.
- 1H may be entered on line 14 for Multi-employer plans.
- For 1095-B form, if an individual is covered by more than one type of minimum essential coverage, reporting is required of only one of the type if certain requirements are met.
Weiskirch is principal at EmployeeTech, Inc. Reach him at (847) 236-1932 or email@example.com.