The Affordable Care Act, sometimes known as, “Obamacare” is the comprehensive health care reform signed into law by President Barack Obama on March 23, 2010. The law provides a list of healthcare policies to the consumers with subsidies (Premium tax credits) intended to expand health insurance coverage to millions of eligible uninsured Americans.
Understanding all the rules required for 1094/1095 filing can be confusing, but don't worry. Read this article thoroughly to understand your specific ACA reporting requirements and learn the process of filing your forms with the IRS.
What are Forms 1094-C and 1095-C?
Forms 1094-C and 1095-C are used by the ALEs to report the required information to the IRS; about the offers of health insurance coverage provided to each employee and whether those employees are enrolled in health coverage.
Form 1094-C is the summary of this information and basically, a “cover sheet” for all of the Forms 1095, used to report to the IRS for each ALE member.
Form 1095-C is used to report information of each employee to the IRS and to the employee who has minimum essential coverage under the employer plan.
FORM 1095-A
Form 1095-A is for those individuals who obtain health insurance coverage through a state or federal health exchange. It provides information about the individual as well as any other members in the household receiving health insurance coverage, premiums, and any advance payment of premium tax credit. Form 1095-A is issued by the health exchanges and not the employers.
Form 1095-B
Form 1095-B is used to report the type of health insurance coverage received by the individual and the period of coverage for the prior year. Health insurance carriers and the employers that administer self-funded insurance plans are responsible to distribute Form 1095-B to their employees. Several details about the individuals, like name, date of birth, and employer information, are reported on Form 1095-B.
What are ALEs?
Any company or organization that has an average of at least 50 or more full-time employees or “full-time equivalents” in the previous calendar year, are considered as ALEs (Applicable Large Employers). Under the definition of the Affordable Care Act, a full-time employee is someone who works at least for a minimum of 30 hours a week.
What forms must be filed?
ALEs under section 6056 must use Form 1095-C to report the health coverage information offered to their employees with the IRS. The Forms must contain the following information:
- When did the employee get the offer of insurance
- What is the employee's coverage status for each month of the year
- Proof of the affordable health insurance plan offered to the employee
Under section 6055, health insurance issuers or carriers and employers offering self-funded group health insurance- must use Form 1095-B to report information about the individuals who had some health coverage for some or all months of the year. The deadlines are the same for both of these forms.
What are the 2021 deadlines?
The deadline for employers to maintain their IRS compliance was March 2, 2021, and to mail paper copies of their Forms 1094-B/C and 1095-B/C to the IRS was February 28, 2021.
If the number of forms you are filing is more than 250, you need to file them electronically.
Penalty
Employers that fail to submit complete and accurate individual statements to the IRS or the full-time employees may be subject to a penalty of up to $280 per return, with a maximum annual penalty of $3,392,000 million.
To Conclude
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