The Internal Revenue Service (IRS) issued a reminder that all employers that provide self-insured health coverage, must file an annual return reporting certain information for each employee they cover. If an employer provides fully insured health coverage, reporting is limited to only those companies that are Applicable Large Employers. All Applicable Large Employers report using Forms 1094-C and 1095-C.
Regardless of whether a self-insured employer is an Applicable Large Employer or not, its covered individuals are reported through Form 1095-B instead of Form 1095-C. In other words, a Health Coverage return (Form 1095-B) must be filed with the IRS for each covered individual. The employer must also provide a copy to each covered employee, which the employees includes with his or her personal tax return.
Companies that file 250 or more information returns must file them electronically. The IRS also encourages those with fewer than 250 returns to file electronically.
The information is used by individuals and the IRS to verify the months, if any, in which individuals were covered by minimum essential coverage required by the ACA. Having this coverage satisfies the individual shared responsibility requirement of Section 5000A of the Internal Revenue Code.
The information reporting requirements first went into effect for coverage provided in 2015, so the first information returns will be filed with the IRS in 2016. Statements to individuals will also first be provided in early 2016, to report coverage in calendar 2015.
The IRS website provides general information on information reporting requirements. Employers who provide self-insured coverage should review Publication 5125, Responsibilities for Health Coverage Providers. Applicable large employers should review Publication 5196, Reporting Requirements for Applicable Large Employers.
