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The IRS released its draft 2020 IRS Forms 1094-C and 1095-C, dated as draft as of July 13, 2020.
There are no changes to the Form 1094-C from the prior year. However, there are some significant changes to the 1095-C. Of course, depending on how these changes impact your reporting on 1095-C, your reporting on the 1094-C may also change. The instructions for these forms have not yet been released.
Significant changes include the addition of new codes (1L through 1S) in the instructions section of the 1095-C. These new codes relate to individual coverage health reimbursement arrangements (HRAs). This is to address a new rule issued pursuant to President Trump’s Executive Order No. 13813. Following this Order, the U.S. Departments of Treasury, Labor, and Health and Human Services issued a final rule that would allow employers to use individual coverage HRAs to reimburse employees for the cost of health insurance coverage purchased in the individual health insurance marketplace. This final rule went into effect on August 19, 2019 and became applicable to plans starting in January 2020.
Another change is the inclusion of Line 17 to provide monthly zip code information for those employees who were offered coverage through an individual coverage HRA. Depending on whether affordability of that coverage was determined based on the employee’s primary residence versus primary work location, the zip code corresponding to the employee’s primary residence or primary work location applies.
If you are an employer with at least 50 full-time employees (including full-time equivalents), you will need to understand whether and how these new codes apply to you before preparing your 2020 Forms 1094-C and 1095-C.
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