New ACA Tax Forms 1094-C and 1095-C

ACA Tax FormsIn the world of the Affordable Care Act  (the ACA or Obamacare), employers who have over 50 FTEs are designated as Applicable Large Employers (ALEs).  For them, 2015 marks the beginning of a whole new reporting mandate where ALEs must document employee health plan offers, participation and exemptions.  Employers who are ALEs must file Forms 1094-C and 1095-C annually by February 28 if filing by paper, and March 31 if filing electronically.

1094-C:  ALE Employer will complete one form for each business Unit
1095-C:  ALE Employer will complete one form for each and every employee who receives a W2

Here are the forms, and a brief explanation.

1094-C:  Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns

Page 1 Part I and II Employer Demographic Information

1094-C 1Page 2  Specific Employee Counts

1094-c 2

The employer fills out one of these forms per each business unit.  The information includes a month by month count of all Full Time Employees (30 hours per week or more) as well as a count of Total Employees on a month/month basis.   The form also provides space for any Transitional Relief Codes.

1095-C:  Employer-Provided Health Insurance Offer and Coverage (See explanation below)

1095-cALEs will be required to produce one 1095-C form for every employee who receives a W-2 form for 2015 and beyond.

1095-C Part I: Basic demographic information.
1095 Part 1

1095-C Part II: Employee Offer and Coverage Options

1095 Part 2

The employer will need to complete lines 14, 15, and 16 on a month-specific basis for each employee.

For line 14, there are 10 different Code options to describe whether and how an employee was eligible for coverage.  The Code from code 1A  to 1H.  1A will be the most common code that is used for employers who offer coverage to an employee and their family at a contribution amount that is below the 9.5% affordability threshold.  There are also codes to cover virtually any situation including employee not offered (1H), coverage only offered to employee only (1B) and other alternatives.

For line 15.  The employer must enter the LOWEST monthly payroll deduction amount that an employee would be required to contribute in order to participate in the lowest-cost, single-only coverage offered by the employer.  Note:  This number can change during the year due to a plan renewal, or if the employer changes contribution amounts.

For line 16:  There are 8 different codes that are available.  The codes range from 2A to 2I.  The codes cover whether the employee was enrolled in coverage (2C), Employee not employed during the month (2A), employee not full-time (2B), employee in waiting period or limited assessment period (2D), and several other situations.

1095-C Part III Covered Individuals (Self Funded Employers ONLY)
1095 Part 3
On this section, ONLY self funded employers need to give an accounting of the employee and any family members, and whether they are covered by the company sponsored plan during any given month during the year.

Note that all family members must be listed.  The form asks for:
(a) Name of Covered Individuals
(b) Social Security Number
(c) Date of Birth of Individual if SSN not available.
(d) Was Individual covered for entire 12 month period?
(e)  If not, which months was the Individual covered.

Conclusion:  These tax forms will obviously require additional record-keeping for 2015.  ALEs would be wise to begin tracking and gathering information as soon as possible to be properly prepared.

Actual IRS Tax Forms can be found here:

Dave Petno
Accelerated Benefits


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