How to Complete IRS Affordable Care Act Forms
We recently updated this blog on August 16 to reflect new guidance released by the IRS in August regarding how to complete IRS Affordable Care Act forms 1094/1095-C and 1094/1095-B. While there has been minimal changes to the forms themselves, there have been some adjustments to how employers are able to report covered non-employees on self-insured plans. We’ve updated our infographics to reflect the latest regulations, as well as our comprehensive ACA reporting white paper, which is a more in-depth companion to the graphics in this blog.
Of note, these are the final regulations for IRS Affordable Care Act reporting for optional 2015 reporting on 2014 plan years. We expect to receive the final regulations for mandatory 2016 reporting later in the summer.
Related Blog: Everything You Need to Know About ACA 1095-C Completion
In previous blogs, we shared the different forms and reporting information required under the ACA, and alluded to the way that varying funding arrangements can impact an employer’s ACA reporting responsibilities. In this blog I would like to walk through the ACA IRS reporting procedures for a combination fully-insured health and self-insured prescription drug funding arrangement, one of the more complex reporting arrangements that we have seen. Don’t worry, we’ve loaded this blog with pictures for our visual learners.
Who Fills out the ACA Forms?
Form preparation in this combination fully-insured health/self-insured prescription drug scenario falls on the shoulders of carriers and employers. Form recipients are made up of coverage-offered employees, and covered non-employees, such as COBRA recipients or covered non-Medicare qualified retirees.
Fully-Insured Health ACA Reporting
For reporting on the fully-insured health, the carrier will prepare the 1094-B transmittal form and 1095-B return forms, and will distribute them to all covered employees and non-employees. The carrier will also file all 1095-B forms using the 1094-B transmittal form with the IRS.
Employers will complete the 1094-C and 1095-C forms, and furnish 1095-C return forms to coverage-offered employees no later than March 31 following the reporting year, regardless of whether or not they took the coverage. Employees who were not offered coverage will not receive a 1095-C form. Also, per the regulations, employees will not receive more than one 1095-C return form from the same employer.
Self-Insured Prescription Drug ACA Reporting
In the self-insured prescription drug portion of the employer-sponsored plan, the dependent information is now consolidated on the 1095-C form in part III. Therefore, employers will not fill out 1095-B forms, as the carrier did, for their covered employees.
As of the latest ACA reporting guidelines, employers now have the option of reporting code Section 6055 reporting requirements for covered non-employees on either the B or C forms. Should they choose the B-form option, they will complete a 1095-B form for each of their covered non-employees, such as COBRA enrollees or covered non-medicare retirees, as well as complete the 1094-B transmittal form. Should they use the C forms for ACA reporting on non-employees, they will only need to complete Part III, and portions of Parts I and II (employers are not subject to Section 6056 reporting requirements for covered non-employees, so “affordability” and “minimum value” information will be left blank for non-employees).
Related Blog: The Pros and Cons of In-House Affordable Care Act Compliance
Ultimately, on the 1095-C form, employers will be consolidating information pertinent to IRS code Section 6056 reporting requirements from both the fully-insured health plan and self-insured prescription drug plan. Remember, only one 1095-C return form gets filed per individual.
Finally, for the self-insured prescription drug portion of the plan, employers will file all B and C forms to the IRS using the appropriate 1094 transmittal forms. For employers with more than 250 return forms, they are required to file electronically by law.
For a complete rundown on the current IRS Affordable Care Act reporting guidelines, check out our ACA IRS Reporting White Paper.
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UPDATE!
AS OF DECEMBER 29, 2015, THE IRS HAS EXTENDED DUE DATES TO THE FOLLOWING..
March 31: Issue forms 1095-C to employees
May 31: Employer 1094/1095-C & 1094/1095-B Deadline for IRS paper filing
June 30: Employer 1094/1095-C & 1094/1095-B Deadline for IRS electronic filing
