demystifying the aca 1095-c and 1094-c forms... · •

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June 9, 2016

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Demystifying the ACA 1095-C and 1094-C Forms


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Cathy Kennedy, CPA

Senior Tax Compliance Manager of NA

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I am ………..


AGENDA

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Learn the basics of completing the Forms 1095-C and the 1094-C

Transmittal

Explain the different 1095 forms (A-C) and who should

get each one.

Review Parts I & II of Form 1095-C

Review the codes in-dept for lines 14 & 16 and review

some IRS examples

Review Part III of form 1095-C


FACTS:

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Form 1095-A – Health Insurance Marketplace Statement

You would receive this if you or someone in your family enrolled in coverage

through the Health Insurance Marketplace, which includes the Federally facilitated

Exchange or one of the State Based Exchanges.

This form is needed to complete the Form 8962 Premium Tax Credit which is filed with

your tax return.

Form 1095-B – Health Coverage

You would receive this form if you, your spouse or your dependents enrolled in

coverage through an insurance provider or self-insured employer with < 50

employees

Form 1095-C – Employer Provided Health Insurance Offer and Coverage

Insurance

You would receive this from your employer if they offered you, your spouse and

dependents coverage that you enrolled in or waived if they employed > 50

people.

Due Date for all of these forms is January 31, 2017 for the employee 2016 Forms

and March 31, if filing electronically, to the IRS.

.


Form 1095-C & Filing Requirements

• 1095-C Requirements:

• The 2016 1095-C information returns are due to the IRS by February

28th 2017 or March 31st 2017 if filed electronically

• The 1095-C or similar statement is to be provided to every full-

time employee to use when filing their individual tax return by

January 31, 2017.

• The statements must be mailed unless the recipient consents to

receive the statement in an electronic format

• There must be only ONE Form 1095-C for each full-time

employee of an employer

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Form 1095-C Part I

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Form 1095-C

Part I - Employee Info. & ALE Member Information

Fill our Employee’s name, SS#, address (line 1-6)

Fill out ALE Member info on lines (7-13)


1095-C Part II

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Part II Employer Offer and Coverage

Line 14 – Enter the Code Series 1A to 1I to identify an Offer of Coverage offered

to an employee, the employee’s spouse and dependents.

What do the codes on line 14 mean?


1095-C Part II Line 14 Codes

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1095-C Part II Line 14 Codes

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MEC* – Minimal Essential Coverage


Form 1095-C Part II Line 15

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Complete only if code 1B, 1C, 1D or IE is entered on line 14

• Enter the amount of the ee’s share of the lowest-cost monthly

premium for self-only minimum essential coverage providing minimum

value that is offered to the employee.

For Example: You have health care coverage for yourself, your spouse

and your dependents and pay $100.00 a month for this coverage. This is

NOT the amount that will show up on line 15.

Instead, the amount on line 15 is the amount your company offers

coverage for self-only MEC providing minimum value per month.



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The code on line 16 explains why your employer did or did not offer you coverage.



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Line 16 Code Explanations:



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The code on line 16 explains why your employer did or did not offer you coverage.


Form 1095-C Line 16

2D – Limited Non-Assessment period refers to a period when an ALE

member will not be subject to an assessable payment for the 5 situations

below only if the employee is offered health coverage by the 1st day of the

1st month following the end of the period which provides minimum value.

January-March of the 1st calendar year in which an employer is

an ALE, but only for an employee who was not offered coverage

by the employer at any point during the prior calendar year.

Employee is under a waiting period due to the employer using a

monthly measurement method

Employee is under the initial measurement period and

associated administrative period under the look-back

measurement method.

If the employee is a variable hour, seasonal or part-time ee but

during the initial measurement period has a change in status

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Form 1095-C Line 14- 16 - IRS Example

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Form 1095-C Line 14-16 - IRS Example

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Form 1095-C & Filing Requirements - Continued

• Part III – Covered Individuals (Lines 17-22)

•Complete Part III only if the employer is self –insured and offers

employer-sponsored health coverage

•Check the box if completing Part III

•This part must be completed by an employer offering self-insured health

coverage for an employee for one or more months whether they were

full-time or part-time if they were enrolled in the coverage

• The employee and the employee’s covered family members under a self-insured

plan must be listed in Part III

.

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15 May 2013


QUESTIONS ??????

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WE ARE ½ WAY DONE…HANG IN THERE…………………….

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15 May 2013


Agenda- 1094C Transmittal

Who must file form 1094-C and the due

date

What an Authoritative Transmittal is and

why one must be filed for each employer

If multiple 1094-C’s can be filed with the

IRS

Review Part II, III and IV Requirements for

Form 1094-C

Can an Extension be filed

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1094-C Transmittal

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Who must file form 1094-C and the due date

Employers with 50 or more full-time employees including FTE must file Forms

1094-C and 1095-C to report required information about their health coverage

to the IRS under Sections 6055 (self-insured) and 6056.

An employer subject to the Employer Shared Responsibility provision under

Section 4980H must file one or more Forms 1094-C including one

Authoritative Transmittal

Due Date of Return

Form 1094-C is due February 28, 2017 or March 31, 2017 if filed

electronically.

You must file electronically if filing more than 250 information

returns, i.e. 1095-C’s.

The 1094-C is filed with the Internal Revenue Service


Multiple 1094-C’s and Part I Requirements:

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Authoritative Transmittal:

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One Authoritative Transmittal must be filed for each employer even if

multiple form 1094-C’s are filed by and on behalf of the single

employer.

For Example: If a company has 2 divisions and each division

reports its employees on a Form 1094-C, one of the Forms 1094-

C filed must be designated as the Authoritative Transmittal and

report aggregate employee-level data for both divisions.

The Authoritative Transmittal reports aggregate employer-level data

for the employer.

If the company is reporting as the Authoritative Transmittal they

would check the box line 19 and complete Part II, III and IV

An ALE Member must file its own Authoritative Transmittal

An ALE member is a single entity that is an ALE (Applicable

Large Employer) or member of an Aggregated ALE Group. An

example of an ALE Group is a parent and 10 wholly-owned

subsidiaries.


Multiple 1094-C’s and Part II Requirements:

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• Can multiple 1094-C’s can be filed with the IRS?

• Yes – A Form 1094-C must be filed when an employer files one or more

Forms 1095-C.

PART II REQUIREMENTS:


Part II Requirements continued:

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Question #21

What is an Aggregated Group?

Commonly owned or related affiliated employers which must combine

their employees to determine their work size. They are treated as a

single employer for purposes of determining whether an employer is

an ALE.

An Aggregated ALE Group - is a group of ALE Members treated as a

single employer

ALE Member – An ALE member is a single entity that is an ALE or

member of an Aggregated ALE Group.


Part II Requirements continued:

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Question #22 – Certifications of Eligibility (Check all that apply)

Qualifying Offer Method

Qualifying Offer method Transition Relief

Section 4980H Transition Relief

98% offer Method


Part II Requirements continued

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A “Qualifying Offer” is an offer that satisfies all of the following criteria:

An offer of minimum essential coverage that provides minimum value;

the employee cost for employee-only coverage for each month does not

exceed 9.5 percent of the mainland single federal poverty line divided by 12;

and

an offer of minimum essential coverage is also made to the employee’s

spouse and dependents (if any).

If a Qualifying Offer was made the employer would use code 1A on line

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Definition of minimum value coverage

• If a plan covers at least 60% of the total allowed cost of benefits expected to

be incurred under the plan it provides minimum value coverage

• The IRS and the Department of Health and Human Services have a

minimum value calculator where employers plug in deductibles and co-

pays to determine if the plan offers minimum value coverage



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Qualifying Offer method Transition Relief

• An Employer would check this box if eligible for and is using the Qualifying

Offer Method Transition Relief for the 2015 calendar year to report information

on Form 1095-C for one or more full-time employees. In order to be eligible:

The Employer must certify that it made a Qualifying Offer for one or more

months of the calendar year for 2015 to at least 70% 95% of its full-time

ee’s.

No entry on line 15, Part II of the 1095-C is required

Code 1A or 1l has to be used on line 14, Part II



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Transition Relief for 2015 The transition relief under Section 4980H is solely for the employer and does not

affect the employee’s potential eligibility for the premium tax credit


Transition Relief for 2015

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There are 2 type of transition relief for 2015. Eligibility for these is reported on Form

1094-C line 22 box C

(1) Employers with 50-99 full-time employees

No assessment payment under 4980H (a) or (b) will apply for any

month during 2015 if the employer had in 2014

< 100 Full-Time employees

has a non-calendar-year plan where a portion falls in 2016

To be eligible Employer cannot:

1. Reduce its worforce from 2.9.2014 – 12.31.2014

2. Eliminate or reduce health coverage offered to ee’s as of

2.9.2014

(2) Employers with 100 or more full-time employees

If an employer had 100 or more full-time employees on business days in 2014

and is subject to the assessable payment under Section 4980H, the

assessment is calculated by increasing the employer’s exclusion number of full-

time employees to 80 instead of 30. See Regulations Section 54.490H-4(e) for

more details


Part II & Part III Requirements continued

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98% Offer Method

An employer would check this box if it certifies that it offered for all

months of the calendar year, affordable health coverage providing

minimum value to at least 98% of its employees for whom it is filing a

Form 1095-C and offered minimum essential coverage to those

employees’ dependents

If employer uses this method they do not have to complete Part III

Column (b) of the 1094-C form


PART III REQUIREMENTS:

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Question # 23 (a)

o If they offered Minimum Essential Coverage to at least 70% 95% of its full-

time employees and their dependents

• If the employer offered MEC to at least 70% 95% of its full-time

employees and their dependents for the entire year put an “x’ in

the “Yes” box on line 23 for all 12 month or the months it was

offered.

• Put an “x” in the “No” box for each month the employer did not

offer MEC to at least 70% 95% of its employees.

Offers of MEC to at least 70% of FT Employees and their Dependents

For 2015, 70% is substituted for 95%



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Question # 23 (a)

https://www.irs.gov/affordable-care-act/employers/transition-relief

• Offers of Minimum Essential Coverage to at Least 70 Percent of Full-Time

Employees (and Their Dependents)

• One of the two employer shared responsibility payments relates to whether an

employer offered minimum essential coverage to at least 95 percent of its full-time

employees (and their dependents). For 2015 (and, in addition, for employers with

a non-calendar year plan year, for the months in 2016 that are part of the 2015

plan year), 70 percent is substituted for 95 percent. However, even if an employer

offers minimum essential coverage to at least 70 percent of its full-time employees

(and their dependents) for 2015, it may still be subject to the other type of employer

shared responsibility payment that applies if a full-time employee receives the

premium tax credit for purchasing coverage through the Health Insurance

Marketplace. For more information about this relief, see section XV.D.7.a of the

preamble to the ESRP regulations.











Part III Requirements Continued

Question #23 (b) - Full-time employee count by month

Enter the number of full-time employee’s for each month, but do not

count employee’s in a Limited Non-Assessment Period.

Limited Non- Assessment Period – A period during which an ALE

Member will not be subject to an assessable payment under section

4980H(a) and in certain cases section 4980H(b) for a full-time

employee regardless of whether that employee is offered health

coverage during that period

Exception – If the employer certifies that it is eligible for the 98% Offer

Method on Line 22 box D then do not complete column (b)

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Part III Requirements Continued:

Question #23 (c) – Total Employee Count for ALE Member

Include the total number of employees, including full-time and

non-full-time employee. Also include employees in a Limited

Non-Assessment Period for each calendar month.

An employer must choose one of the following days to determine the

# of ee’s per month and must use the same day for all months of the

year

The 1st day of each month

The last day of each month

The 1st day of the 1st payroll period that starts during each month

The last day of the first payroll period that starts during each month.

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Part III Requirements Continued:

Question #23 (d) – Aggregated Group Indicator

This must be completed if the ALE Member was part of an

Aggregated ALE Group and marked the box “Yes” on line 21.

If the employer was a member of an Aggregated ALE Group

during each month of the calendar year enter “X” in the “All 12

Month” box

If the employer was not a member for all 12 months but was a

member for one or more months indicate which months by

entering an “X” for the applicable months.

Question #23 (e) – Use one the 2 following codes if company certifies

that section 4980H Transition Relief is Applicable

o Column (e) 4980H Transition Relief Indicator

o Code A – Eligible for the 50-99 Relief

o Code B – Eligible for the 100 or more Relief

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Part IV Requirements & Extensions

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Part IV Requirements & Extensions

Part IV – Other ALE Members of Aggregated ALE Group

If the employer was a member of an Aggregated ALE Group for any

month of the calendar year, enter the names and EIN #’s up to 30 of

the other Aggregated ALE Group members.

If >30 then enter only 30 with the highest monthly average number of

full-time employees

List in descending order listing first the member with the highest

average monthly # of full-time employees

EXTENSIONS

Form 1094-C must be filed by February 28, 2017 if paper return or by

March 31, 2017 if filed electronically.

File Form 8809 online through the FIRE system at:

http://fire.irs.gov

Maximum extension is 30 days and is automatic

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http://fire.irs.gov/

15 May 2013


QUESTIONS ??????

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Resources

• Additional Resources

• http://www.irs.gov/Affordable-Care-Act

• http://www.irs.gov/irb/2014-13_IRB/ar09.html



• http://search.hhs.gov/search?q=minimum+value+

calculator&site=HHS&entqr=3&ud=1&sort=date

%3AD%3AL%3Ad1&output=xml_no_dtd&ie=UT

F-8&oe=UTF-

8&lr=lang_en&client=HHS&proxystylesheet=HH

S

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http://www.irs.gov/Affordable-Care-Act







http://www.irs.gov/irb/2014-13_IRB/ar09.html












http://search.hhs.gov/search?q=minimum+value+calculator&site=HHS&entqr=3&ud=1&sort=date:D:L:d1&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&lr=lang_en&client=HHS&proxystylesheet=HHS










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