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IRS Releases Final Version of the Year End ACA Forms


This past week, the Internal Revenue Service has published the final versions of Forms 1094-C and 1095-C, and their respective instructions for tax year 2015.  These forms will be used by employers to report offers of health insurance coverage made to their full-time employees after year end.  While not much has changed on the forms themselves from the earlier draft, there has been some clarification in reporting in the final version of the instructions.
Applicable large employers (ALE) must file these forms with the IRS annually, no later than February 28 (March 31 if filed electronically) of the year immediately following the calendar year to which the return relates.  This is the same filing schedule applicable to other information returns commonly filed by employers, such as Forms W-2 and 1099.  ALE members are required to furnish the 1095-C form to each full-time employee that includes the same information provided to the IRS, by January 31 of the calendar year following the calendar year for which the information relates.  An employee is considered full-time if they work at least 30 hours per week on average over the course of a month, or 130 hours in the month.
The 1095-C form is comprised of three parts;

  • Part I is straight forward, and calls for basic static information about the employee and employer.
  • Part II is where the offers and coverage is indicated, on a monthly basis, if needed. The first line, Line 14, is whether the employee, spouse, and/or qualified dependents were offered minimum essential coverage (MEC), and whether such coverage provided minimum value.  The second line, Line 15, reports the employee’s share of the lowest-cost monthly premium for self-only minimum value coverage.  This is not to be confused as to what the employee may actually pay on a monthly basis for their insurance coverage.  The third line, Line 16, includes any additional information needed to determine whether the employer may be liable for a shared responsibility payment.  This would include indication of months where the employee was not employed full-time.  A list of the codes for Line 14 can be found on the 1095-C form itself, while Line 16 codes are only found in the full instructions.
  • Unless you are a self-insured employer, then you can stop there.  Only self-insured ALEs will complete Part III of this form.  This is where a listing of covered individuals under the employee are indicated, along with identifying information and the months of their respective coverage.

The other form mentioned, the 1094-C, is what we can equate to the W-3 in relation to the W-2 form. It is the transmittal form that accompanies the 1095-C forms in their filing to the IRS.  This form has four parts, with requests for information ranging from basic company information to questioning how many full-time employees there are for each month, and listing control group related companies.

The good news is that as a PayMaster client, we will prepare and file these returns on your behalf.  If your company is an ALE, there are some additional fields on each employee that need to be completed (namely Lines 14 & 16) as well as additional company information.  Contact your payroll specialist for additional information.

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