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With the end of the year approaching quickly, ACA compliance and the subsequent ACA reporting are ramping up. Employers preparing for IRS and state filing requirements should consider the importance of the 1095-C form.
What is the 1095-C form?
Form 1095-C is a record of an ACA full-time employee’s health coverage for a particular year. The IRS says that the 1095-C form “is filed and furnished to any employee of an Applicable Large Employers (ALE) member who is a full-time employee for one or more months of the calendar. ALE members must report that information for all twelve months of the calendar year for each employee.”
What information does the 1095-C form show?
In addition to employee census information, such as name, address, birth date, social security number, and relevant employer information, the 1095-C form shows the type of coverage an employee received, how much it cost, and any other related information that substantiates ACA requirements.
It’s important to note that the details regarding the coverage offered to the ACA full-time employee reflect the lowest cost plan available, the lowest contribution amount available to the employee, and if the offer met certain ACA criteria, like Minimum Value (MV) and Minimum Essential Coverage (MEC).
Who receives a 1095-C form?
Applicable Large Employers (ALEs) must issue Form 1095-C to their respective ACA full-time employees and to the IRS. Certain states, such as California, New Jersey, Massachusetts, and Vermont also require additional reporting requirements around the 1095-C form.
How do you file 1095-Cs with the IRS?
Currently, there are two methods for filing 1095-C forms with the IRS: electronic filing and paper filing. These respective reporting methods have different deadlines and qualifying criteria. For example, organizations with more than 250 1095-C filings cannot elect to paper file. This threshold could drop to 100 next year, however, pending a new IRS ruling.
Employers that have the option to paper file or e-file should elect for the electronic method because it allows for more preparation time for filing, provides immediate receipt of the filing, and identifies errors in reporting instantly. These precautions can help you limit penalty exposure and ensure your filings are received accurately and on time.
Do the 1095-C forms need to be filed with anything else?
The 1095-C forms must be filed with the accompanying 1094-C form. The 1094-C is a cover form that captures employer information, including ALE members, primary location, designated point of contact, and the total number of 1095-C forms included in the filing submission.
Are there any penalties for failing to file/furnish 1095-C forms?
Employers that fail to file and or furnish the 1095-C forms can be subject to ACA penalties from the IRS under IRC 6721/6722. Organizations that don’t file their 1094-C and 1095-C forms with the IRS and/or fail to distribute the 1095-C forms to their ACA full-time employees can be subject to Letter 5005-A penalties. Organizations that file and or furnish their 1094-C and 1095-C forms late can be subject to Letter 972CG penalties.
If you have received an IRS ACA penalty notice of any kind, contact Trusaic to learn about solutions for eliminating or reducing the proposed assessment. So far we’ve helped eliminate over $1 billion in ACA penalties.
How do you code the 1095-C form?
Coding the 1095-C forms can be difficult, and with the IRS ramping up enforcement of ACA non-compliance, the stakes are high for getting it right. To learn how to accurately code the 1095-C form, we created the Employer’s Guide to Coding ACA Form 1095-C. Download it now to gain immediate access to actual coded 1095-C forms from three distinctly different organizations that offer unique healthcare to their employees. The guide also includes Form 1095-C analysis and IRS penalty exposure explanations.
There’s more to know about the 1095 forms, so be sure to check out our previous post on the related Form 1095-A and 1095-B.
As a reminder to employers, ALEs are employers with 50 or more full-time employees and full-time equivalent employees that must comply with the ACA’s Employer Mandate and:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.
If you need assistance with ACA compliance and are unsure of how the IRS may assess penalty assessments, get your ACA Vitals for free today. This all-new interactive quiz will provide you with great insights into how well your organization is complying with the healthcare law’s Employer Mandate.
We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.
