ACA Mailbag: Commonly Asked Questions about 1095-C Forms
ACA 1095-C furnishing and filing can be complicated. Below are frequently asked questions that may help with better understanding some common scenarios.
Q: Why didn’t employee get a 1095-C form? A: When you are outsourcing your form generation, you are relying on your vendor (and your vendor’s software) to provide complete and accurate forms. Here are some tips and questions to help answer this.
A: Make sure your vendor has the accurate hire and term/retirement dates for the employee. If the employee doesn’t receive a form, it’s possible the vendor doesn’t have their information.
Was the employee full-time and did the employee work at least one calendar month during the reporting year? Forms should be provided for each full-time employee who worked for at least one calendar month during the reporting year. This includes any employee who was treated as a full-time employee for one or more months of the calendar year under the look-back measurement method for determining full-time employee status under the employer shared responsibility provisions.
3. If the employee was not a full-time employee, do you offer self-insured coverage? Forms should be provided for employees and covered individuals per Section 6055 requirements.
4. If your employee was not full-time for at least one calendar month (part-time, seasonal, hired and termed within the same month) and you do not offer self-insured coverage (or you do offer self-insured coverage and the employee did not elect that coverage) the employee would not receive a form.
Q: My retired former employee doesn’t have coverage but got a form. Why?
A: When did the employee retire? If they were a full-time employee and retired sometime in the reporting year, they’d receive a form to show the months where they were a full-time employee. If the individual was not employed at all during the reporting year, confirm with your vendor that they show the individual in a retired status with the proper retirement date.
Who gets a 1095-C form?
A: There are multiple reasons someone should get a form:
a. ACA FT employees that were active in the reporting year. An employer must complete information for all twelve months of the calendar year for any of its employees who were full-time employees for one or more months of the calendar year.
b. Retirees may also receive a form. A retiree (meaning an individual who was not an employee during the applicable period) is not a full-time employee. However, if the retiree was a full-time employee for any month of the calendar year (for example, before retiring mid-year), the employer must complete information in Part II of Form 1095-C for all twelve months of the calendar year, using the appropriate codes.
c. Anyone under 65 who is enrolled in self-insured coverage. This will either be an under 65 employee/early retiree/retiree – OR - an over 65 subscriber covering dependents under 65. Retired individuals covered by Medicare would receive a 1095-B from Medicare. Q. Who doesn’t get a form?
A: Part-time employees in a part-time ACA status for the entire year, if not enrolled in self-insured coverage. B. Over age 65 retirees without under age 64 dependents. Retired individuals covered by Medicare would receive a 1095-B from Medicare.
Q: Why is part III filled in on some forms but not others? A: Part III is used by employers with self-insured coverage to fulfill Section 6055 reporting requirements. If an employee has not elected self-insured coverage, they would have no coverage to report in part III. It comes down to a difference in the IRS §6055 (do individuals have coverage) vs. §6056 reporting requirements (have employers offered coverage). Employers are supposed to provide 1095-C forms for ACA FT employees to show if minimum essential coverage that provides minimum value and is affordable is offered to at least 95% of their ACA FT employees and their dependents. The offer is recorded in part II of the 1095-C form (lines 14-16). Those employers that offer fully insured coverage stop there with the reporting requirements since the actual coverage election will be reported by the insurance carrier on the 1095-B form. Those employers that offer self-insured coverage become the insurance carrier by default so must report on not only the offer (as explained above) but the coverage. Thus, part III is populated on the 1095-C to fulfill both requirements (offer and coverage) since the individuals wouldn’t receive a 1095-B from a different carrier. If an employer offers both a fully insured plan and a self-insured plan the forms would look different (part III) depending on which plan each employee elects. Those that elect a fully insured plan wouldn’t have any information in part III and they’d receive a separate form from the insurance carrier. Those that elect a self-insured plan would only receive the 1095-C form and part III would be populated to show who was covered and for what months. Confirm which coverage the employee is enrolled in and that verify if part III accurately represents the election. Q: Employee only had self-insured coverage for a few days of a month (or didn’t have coverage for the whole month), why is the box checked in part III for that month? A: Per IRS instructions, the box will be checked if coverage was available for at least 1 day of the month. Q: My employee passed away, what do I do with his/her form? A: Furnish the form to his/her estate. The estate may want to reference the form when completing any final tax documents. Q: Employee was hired on any day other than the first of the month or termed on any day other than the last of the month, why is there a 1H instead of a 1A or 1E? A: In order for a code to reflect an offer of coverage, that offer must exist for the entire month. Any hires on a day other than the first of the month and any terms other than on the last of the month, would not be able to reflect a full month offer; thus, the code is 1H. For new hires that would reflect a limited non-assessment period. For terms, the 1H reflects the removal of coverage offered.
i. It doesn’t matter if they elect coverage or not. If they are FT as per above, they get a form.
