IRS Health Care Tax Tip 2016-26, March 2, 2016
If you are a health coverage provider or an employer of a certain size, the health care law requires you to prepare new information returns starting for 2015. If you are a health coverage provider, the returns provide information about the health coverage you provided for individuals. If you are an employer of a certain size, the returns provide information about the coverage you offered -or did not offer- to your full-time employees. You must report the information to the relevant individuals and the IRS.
The reporting requirements for health coverage providers and applicable large employers are new. There are new IRS forms that health coverage providers and applicable large employers will use to complete this reporting. The first information reporting returns are due in 2016 for coverage in 2015. Coverage providers - other than self-insured applicable large employers - file Form 1095-B, Health Coverage. Applicable large employers file Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. If you file either of these forms with the IRS, you must also file the associated transmittal form. Use Form 1094-B, Transmittal of Health Coverage Information Returns, or Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.
In general, the health care law requires individuals in the United States to have qualifying health care coverage – also called minimum essential coverage – qualify for an exemption, or make a payment when they file their federal income tax returns. Providers of minimum essential coverage, including all employers who offer self-insured health plans, are required to report information to individuals and the IRS about the coverage they provided to enrollees.
Employers with 50 or more full-time employees, including full-time equivalent employees, are called applicable large employers. These employers may choose to either offer minimum essential coverage that is affordable and that provides minimum value to their full-time employees - and offer minimum essential coverage to the full-time employees' dependents – or potentially make an employer shared responsibility payment to the IRS. Applicable large employers are required to report information to full-time employees and the IRS about the coverage they offered or did not offer to their full-time employees.