E-File 1095-C

What is Form 1095-C: Employer-provided Health Insurance Offer and Coverage?

Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," is an IRS form used by Applicable Large Employers (ALEs) to report information about the health insurance coverage they offer to their full-time employees. This form is part of the requirements under the Affordable Care Act (ACA) to ensure that employers are providing minimum essential coverage that is affordable and meets specific minimum value standards.

• Who Must File: ALEs, typically employers with 50 or more full-time employees or equivalents, must file Form 1095-C for each full-time employee.
• What It Reports: Form 1095-C reports details about the health coverage offered to employees, including the type of coverage, the cost of the coverage, and the months when coverage was available. It also provides information on employees' share of the monthly premium.
• Recipient Information: Employers must furnish a copy of Form 1095-C to each full-time employee, and a copy is also sent to the IRS. The information helps employees complete their tax returns and helps the IRS enforce the ACA's individual mandate and employer shared responsibility provisions.
• Filing Deadlines: Employers must furnish Form 1095-C to employees by a specific due date, usually in late January or early February, and file with the IRS by the end of February (if filing on paper) or the end of March (if filing electronically).

Failure to comply with the requirements for Form 1095-C may result in penalties.

Form 1095-C: An Overview

Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," is a critical tax form required under the Affordable Care Act (ACA). It provides an overview of the health insurance coverage offered by Applicable Large Employers (ALEs) to their full-time employees, ensuring compliance with specific ACA requirements. Here's an overview of Form 1095-C:

• Filed by ALEs: Typically filed by employers with 50 or more full-time employees or equivalents, including governmental organizations, private employers, and nonprofits.
• Purpose: To report information about the health insurance coverage offered to full-time employees, and to demonstrate compliance with the ACA's employer shared responsibility provisions.
• Information Included: Details of the offer of coverage, including the months coverage was available, the employee's share of the monthly premium, and whether the coverage met minimum value and affordability standards.
• Recipient Copies: A copy must be furnished to each full-time employee and filed with the IRS. The information aids employees in completing their tax returns and allows the IRS to enforce the ACA mandates.
• Filing Deadlines: Specific deadlines apply for furnishing the form to employees and e-filing with the IRS, generally March 2nd and March 31st respectively.
• Penalties: Failure to file or incorrect filing may result in penalties, making it crucial for employers to understand the form and comply with its requirements.

Form 1095-C plays a vital role in the administration of the ACA, providing transparency about health insurance offers and supporting the enforcement of the law's provisions. Employers should consult the latest IRS guidelines or work with tax professionals to ensure accurate and timely compliance with Form 1095-C requirements.

Penalties for Failing to File Form 1095-C

Failure to file Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," or failure to furnish the form to employees, can result in substantial penalties for Applicable Large Employers (ALEs). These penalties are as follows:

• Failure to File with the IRS: Penalties can apply for each instance of failing to file Form 1095-C with the IRS by the required deadline. The penalty may vary depending on how late the filing is and whether there was intentional disregard of the filing requirements.
• Failure to Furnish to Employees: Similar penalties apply for failing to provide Form 1095-C to full-time employees by the deadline. Penalties can be imposed for each form not furnished to an employee.
• Potential Reductions or Waivers: Penalties may be reduced or waived if the failure was due to reasonable cause and not willful neglect. Prompt corrective action, reasonable efforts to comply, and cooperation with IRS guidance can be factors in reducing penalties.
• Adjustments for Inflation: Note that the penalty amounts can be adjusted annually for inflation, and the specific amounts may vary from year to year.

It is crucial for ALEs to understand their filing obligations and to take the necessary steps to comply with Form 1095-C requirements. Being aware of deadlines, ensuring accurate completion of forms, and seeking professional guidance when needed can help avoid these penalties. Employers should refer to the official IRS instructions and consult with tax professionals to understand the precise penalties applicable to their circumstances.

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Do you need to send a 1094-C with the 1095-C?

When filing Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," Applicable Large Employers (ALEs) are also required to transmit Form 1094-C, "Transmittal of Employer-provided Health Insurance Offer and Coverage Information Returns." Form 1094-C serves as a transmittal form, providing summary information about the ALE and the 1095-C forms being submitted. It includes details such as the total number of 1095-C forms filed, the employer's name, address, and Employer Identification Number (EIN), and information regarding whether the employer met certain ACA requirements. The combination of Forms 1094-C and 1095-C helps the IRS enforce the Affordable Care Act's employer mandate and individual coverage requirements, as well as to determine eligibility for premium tax credits. Failure to submit Form 1094-C along with Form 1095-C may result in penalties and could affect the processing of the submission.

Who has to file Form 1095-C?

Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," must be filed by Applicable Large Employers (ALEs). An ALE is generally defined as an employer that had an average of 50 or more full-time employees, including full-time equivalent employees, during the preceding calendar year. This includes private sector employers, governmental entities, nonprofits, and other organizations that meet the size criteria. ALEs are required to report information about the health insurance coverage offered to full-time employees using Form 1095-C, in compliance with the Affordable Care Act (ACA) provisions. Filing Form 1095-C helps the IRS enforce the ACA's employer mandate, ensuring that employers meet their shared responsibility obligations to provide minimum essential coverage that is affordable and meets specific value standards.

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What are the deadlines for submitting form 1095-C?

Deadlines for submitting Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," are critical for compliance and vary based on the filing method:

• Furnishing to Employees: Employers must furnish Form 1095-C to each full-time employee by March 2 of the year following the reporting year.
• Filing with the IRS (Paper): If filing on paper, the deadline to submit Form 1095-C to the IRS is typically February 28 of the year following the reporting year.
• Filing with the IRS (Electronic): If filing electronically, the deadline is March 31 of the year following the reporting year. Note that ALEs filing 10 or more Form 1095-C must file electronically.

Failure to meet these deadlines may result in penalties, and employers should be aware of the specific dates for each reporting year.

Employers may be able to request a filing extension using IRS Form 8809, "Application for Extension of TIme To File Information Returns." It's important to note that any extension requests must be submitted prior to the original filing deadline.

What is the difference between form 1095-C and 1095-B?

Forms 1095-C and 1095-B are both integral to the Affordable Care Act (ACA) reporting, but they serve different functions and are used by different entities:

• Form 1095-C:
  • Filed by: Applicable Large Employers (ALEs), typically those with 50 or more full-time employees or equivalents.
  • Purpose: To report information about the health insurance coverage offered to full-time employees, as well as to demonstrate compliance with the ACA's employer shared responsibility provisions.
  • Information Included: Details of the offer of coverage, including the months coverage was available, the employee's share of the monthly premium, and whether the coverage met minimum value and affordability standards.
• Form 1095-B:
  • Filed by: Health insurance providers, such as insurance companies, and small employers that provide self-insured health coverage.
  • Purpose: To report information about individuals covered by minimum essential coverage, including employees, spouses, and dependents, and to demonstrate compliance with the ACA's individual mandate.
  • Information Included: Details about the covered individuals, including names, Social Security numbers or other taxpayer identification numbers, and the months they were covered.

While both forms are connected to ACA reporting, Form 1095-C is focused on the employer's offer of coverage to full-time employees, while Form 1095-B is focused on the reporting of individuals covered by minimum essential coverage. Employers and providers should carefully review the requirements for each form to ensure accurate and timely compliance.

What if an employee didn't participate in the employer's health plan?

If an employee did not participate in the employer's health plan, Applicable Large Employers (ALEs) must still report the offer of coverage on Form 1095-C, "Employer-provided Health Insurance Offer and Coverage." Specifically:

• Part II of Form 1095-C: This section is used to report information about the offer of coverage. Employers will enter a code on Line 14 to indicate the type of offer made, even if the employee declined the coverage. Line 16 may be used to enter a code that specifies the reason the employee was not enrolled, such as a waiver of coverage.
• Other Parts of the Form: Depending on the circumstances, other parts of Form 1095-C may or may not require entries related to the employee who did not participate.

It's essential to complete Form 1095-C accurately, reflecting the true circumstances of the offer and any related conditions. Employers should refer to the official IRS instructions for Form 1095-C or consult with tax professionals to ensure proper reporting for employees who did not participate in the health plan.

What type of basic information is required to file 1095-C?

When filing Form 1095-C, "Employer-provided Health Insurance Offer and Coverage," Applicable Large Employers (ALEs) must provide the following basic information:

• Employer Information:
  • Name and address of the employer.
  • Employer Identification Number (EIN).
  • Contact person's name and telephone number.
• Employee Information:
  • Name, address, and Social Security Number (SSN) or other Taxpayer Identification Number (TIN) of the full-time employee.
  • Information on the offer of coverage using the appropriate ACA codes, including months offered, and the employee's share of the monthly premium.
  • Whether the coverage met minimum value and affordability standards.
• Other Coverage Information:
  • If self-insured, information about covered individuals, including names, SSNs or TINs, and the months they were covered.
  • Any other applicable codes or information related to the specific type of coverage offered or waivers, if applicable.

This information helps the IRS enforce the ACA's employer mandate and individual coverage requirements and determines eligibility for premium tax credits. Employers should carefully review the instructions for Form 1095-C and may consult with tax professionals to ensure accurate and complete reporting.