MayReport - page 10

y January 31, 2016, applicable large employers will be
required to send Forms 1095-C to verify certain informa-
tion about the employer’s 2015 health coverage. Form
1095-C will be used by the IRS to verify an individual’s compli-
ance with the Affordable Care Act individual mandate, to verify
an individual’s eligibility for a Marketplace premium tax credit,
and to verify an employer’s compliance with the employer “pay
or play” rules.
Compliance with each of these requirements is determined
on a monthly basis, so Form 1095-C will contain a month-
by-month report regarding the health coverage offered to an
individual and whether the individual and any dependents were
actually enrolled in that health coverage. Because the form will
contain an individualized month-by-month report, employers
should understand the reporting requirements now to ensure
that they will have the necessary data for accurate reporting in
What is a Form 1095-C?
The Form 1095-C is an individualized statement that
informs the employee and the IRS about the employer’s health
coverage. As with Forms W-2 and W-3, an employer will
provide a Form 1095-C to each eligible recipient by January 31
following the reporting year and will transmit copies of those
forms to the IRS with a transmittal Form 1094-C.
Which Employers Must Provide Form 1095-C?
An employer must provide Form 1095-C if it is an applicable
large employer under Internal Revenue Code Section 4980H
(known as the “employer mandate” or the “employer pay or
play” rules). Generally, an employer is an applicable large
employer if it and other employers within its controlled group
together employed an average of at least 50 full-time employees
and full-time equivalent employees in the prior calendar year.
: Applicable large employers who employed an average
of less than 100 full-time employees and full-time equivalent
employees in 2015 can qualify for transition relief to delay ap-
plication of the employer mandate until 2016. However, the
reporting requirement is not also delayed. Employers who
qualify for this transition relief will be required to provide a
2015 Form 1095-C to their full-time employees.
Each employer is responsible for providing Forms 1095-C to
its employees. If multiple companies within the same controlled
group participate in a single health plan sponsored by the par-
ent company, reporting must nevertheless be done separately
by each employer. While an employer may delegate the actual
preparation and filing of the reports (for example, to the parent
company or a vendor), the employer will ultimately be liable for
any non-compliance.
Which Individuals Must Receive Form 1095-C?
An applicable large employer generally must provide Form
1095-C to any employee who is treated as a full-time employee
under the Affordable Care Act and to any other employee or
non-employee (including a retiree, a former employee enrolled
in COBRA coverage, or a non-employee director) enrolled in
self-insured health coverage offered by the employer during any
month of the year.
: Because these forms must be provided to all employ-
ees who are considered full-time under the Affordable Care Act,
an employer must understand the rules and regulations applica-
ble to a determination of full-time status. Failure to understand
these rules could cause the employer to misclassify an employee
and therefore be subject to a penalty for failure to provide a
Form 1095-C.
If an employer offers affordable (under the federal poverty
line safe harbor), minimum value coverage to an individual and
any spouse and dependents for all twelve months of the year,
the employer may give the individual a certification statement
instead of completing Part II of the Form 1095-C. However, the
employer will still be required to complete a Form 1095-C for
that employee and submit the form to the IRS. If the employee
Employers Should Be Preparing Now
for Form 1095-C Reporting
By Kimberly Wilcoxon
Ed. Note: This information was submitted for publication on March 4, 2015.
It does not reflect guidance issued on or after this date.
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