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Questions and Answers about Information Reporting by Employers on Form 1094-C and Form 1095-C

Employers subject to section 4980H of the Internal Revenue Code (“Code”), generally meaning employers with 50 or more full-time employees (including full-time equivalent employees) in the preceding calendar year, use Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to report the information required under Code sections 6055 and 6056 about offers of health coverage  and enrollment in health coverage for their employees.  Form 1094-C must be used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS.  Form 1095-C is used to report information about each employee.  The information reported on Form 1094-C and Form 1095-C is used in determining whether an employer owes a payment under the employer shared responsibility provisions under section 4980H.  Form 1095-C is also used by the IRS and the employee in determining the eligibility of the employee for the premium tax credit. 

Employers that offer employer-sponsored self-insured coverage also use Form 1095-C to report information to the IRS and to employees about individuals who have minimum essential coverage under the employer plan and therefore have met the individual shared responsibility requirement for the months that they are covered under the plan.

These FAQs provide detailed information about completing Form 1094-C and Form 1095-C. For information about the reporting requirements under section 6056, including guidance on who is an ALE member, see section 4980H Questions and Answers and section 6056 Questions and Answers.  For details about additional reporting requirements applicable to sponsors of self-insured health plans under section 6055, see Questions and Answers on Information Reporting by Health Coverage Providers.

 

 

Basics of Employer Reporting

 

1. What forms must an ALE member file with the IRS to report the required information under sections 6055 and 6056?

The section 6056 regulations provide, under the general method of reporting, that an ALE member must file a separate Form 1095-C (or a substitute form) for each of its full-time employees, and a transmittal on Form 1094-C (or a substitute form) for all of the returns filed for a given calendar year.  These forms must be filed regardless of whether the ALE member offers coverage, or the employee enrolls in any coverage offered. A more complete discussion of the information that must be reported to the IRS (including simplified methods of reporting) can be found in the final section 6056 regulations, in the final section 6055 regulations, and in the instructions to Form 1094-C and Form 1095-C.

The section 6056 return (and, if the employer maintains a self-insured plan, the section 6055 return) also may be made by filing a substitute form, but the substitute form must include all of the information required on Form 1094-C and Form 1095-C and satisfy all form and content requirements as specified by the IRS.

2. For which employees must an ALE member file Form 1095-C?

Generally, an ALE member must file Form 1095-C (or a substitute form) for each employee who was a full-time employee of the ALE member for any month of the calendar year. (But see question 4 below for exceptions.) For guidance on how to determine who is a full-time employee, see section 4980H Questions and Answers.

In addition, an ALE member that sponsors a self-insured plan must file Form 1095-C for each employee who enrolls in the self-insured health coverage or enrolls a family member in the coverage, regardless of whether the employee is a full-time employee for any month of the calendar year.

3. What information must an ALE member furnish to its full-time employees?

An ALE member must furnish to each full-time employee a completed Form 1095-C (or a substitute form). This form must be furnished regardless of whether the ALE member offers coverage, or the employee enrolls in any coverage offered. An ALE member is not required to furnish to its full-time employees a copy of Form 1094-C as filed with the IRS.  

A substitute form must include the information on Form 1095-C and must comply with generally applicable requirements for substitute forms. See questions 11 and 12 for further information about simplified employee statements that may be used under the Qualifying Offer reporting method.

4. For which employees is an ALE member not required to file a Form 1095-C?

Form 1095-C is not required for the following employees (unless the employee or the employee’s family member was enrolled in a self-insured plan sponsored by an ALE member):

    •  an employee who was not a full-time employee in any month of the year; or
    •  an employee who was in a limited non-assessment period for all 12 months of the year (for example, a new variable hour employee still in an initial measurement period). See the definition of Limited Non-Assessment Period in the instructions to Form 1095-C for more details.

       5. Which ALE members should complete Part III of Form 1095-C?

An ALE member that sponsors a self-insured health plan should complete Part III of Form 1095-C for employees and family members who enroll in the self-insured coverage.

If an ALE member sponsors a health plan that includes self-insured options and insured options, the ALE member should complete Part III of Form 1095-C only for employees and family members who enroll a self-insured option.

An ALE member that offers coverage through an employer-sponsored insured health plan (and does not sponsor a self-insured health plan) should NOT complete Part III. Instead, information about coverage will be furnished to employees on Form 1095-B, which is filed by the insurance provider.

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6. How should an ALE member report whether an offer of coverage was made to an employee for a calendar month?

The ALE member uses line 14, Offer of Coverage, in Part II of Form 1095-C to report whether an offer of coverage was made to an employee for each month of the year. An offer of coverage is considered to have been made for a month only if the coverage offered would provide coverage for every day of that month.  The ALE member should enter the appropriate indicator code to indicate what type of coverage, if any, was offered to the employee for that month (for example, employee-only coverage, employee and dependents coverage, employee, spouse and dependents coverage, etc.). However, see questions 7 and 8 below for more information about reporting offers of coverage for the months in which an employee is hired or terminated. For more information about this reporting and the use of the indicator codes, see the instructions for Forms 1094-C and 1095-C.

7. How should information about the offer of coverage for the month in which an employee is hired be reported on Form 1095-C? 

For the first month of employment, the ALE member should report that the employee was not offered coverage for that first month by entering code 1H, No offer of coverage, on line 14 (unless the offer of coverage extended to every day of that month).  For example, if a newly-hired employee starts employment on the 10th of a calendar month, with the offer of coverage (if accepted) providing coverage also starting on the 10th of a calendar month, the ALE member should indicate that the employee was not offered coverage for that first month.  

Note, however, that the ALE member may be entitled to relief from section 4980H liability for that month.  For instance, the first three months after an employee first becomes a full-time employee may be treated as a limited non-assessment period if all applicable conditions are satisfied, which would be reported as code 2D, Employee in a section 4980H(b) Limited Non-Assessment Period, on line 16. (For further information on limited non-assessment periods, see the section 4980H Questions and Answers.) If applicable, the employer should insert the appropriate indicator code on line 16 for that month to reflect the applicable relief from section 4980H.  See the instructions for Forms 1094-C and 1095-C for more information on reporting for new hires and the use of indicator codes.

On Part III of Form 1095-C, an ALE member should report an individual as having coverage under the plan for the calendar month if the individual was covered for any day of the calendar month. Accordingly, if the ALE member offers a self-insured health plan, and the employee enrolls in the plan and obtains coverage for any day during the first month of hire, the employee (and any other individuals such as spouses and dependents who obtained coverage through the employee’s enrollment) should be reported as having coverage for that month under Part III of Form 1095-C.

8. How should information about the offer of coverage for the month in which an employee terminates employment be reported on Form 1095-C? 

As discussed in question 7 above, an ALE member reports that an employee was offered coverage for a month under Part II of Form 1095-C only if the offer of coverage would provide coverage for all days of the calendar month. Accordingly, if an employee terminates employment [with an ALE member] on any day other than the last day of a month and the coverage or offer of coverage expires upon termination of employment, the ALE member should report that the employee was not offered coverage for that final month of employment by entering code 1H, No offer of coverage, on line 14.

If the coverage or offer of coverage would have continued if the employee had not terminated employment during the month, the ALE member will be eligible for relief under section 4980H for that employee’s last month of employment.  In that case, the ALE member should enter code 2B, on line 16 for that month.  See the instructions for Forms 1094-C and 1095-C for more information on reporting for a terminated employee and the use of indicator codes.

9. Is an ALE member required to enter a code in line 16, Applicable Section 4980H Safe Harbor, of Form 1095-C? 

No. An ALE member is not required to make an entry on line 16 of Form 1095-C. However, an ALE member can use line 16 to indicate whether the ALE member qualifies for an exception from the assessable payment under section 4980H(b) for a given month. An ALE member should enter the appropriate code on line 16 if any applies. For more information about using line 16, see the Instructions for Forms 1094-C and 1095-C. If no code is applicable for a given month, line 16 should be left blank.

10. How should an employer report enrollment information for self-insured coverage provided to an individual who was not an employee on any day of the calendar year, such as a non-employee COBRA beneficiary (for example, the former spouse of an employee), member of the board of directors, or retired employee?

An employer that sponsors a self-insured health plan may report enrollment information for individuals who were not employees on any day of the calendar year by entering code 1G, Offer of coverage to employee who was not a full-time employee for any month of the calendar year, on line 14 of Part II of Form 1095-C for all twelve months and completing Part III of Form 1095-C. (Note, however, that Form 1095-C requires the recipient’s Social Security number (SSN) on line 2 in all instances, so Form 1095-C cannot be used for covered individuals who have not provided a SSN to the employer regardless of whether the employer has requested the information.) Such individuals might include a non-employee director, a terminated employee receiving COBRA coverage who terminated employment in a previous calendar year, a retired employee who terminated employment in a previous calendar year, or a family member (including a surviving spouse or dependent) of such an individual if the family member is receiving coverage independent of the individual, such as by electing individual COBRA continuation coverage. All family members of the individual who are covered individuals due to that individual’s enrollment (for instance, a spouse of a retiree who is enrolled in the plan because the retiree elected self plus spousal coverage) should be included on the same Form 1095-C as the individual who enrolls in the coverage.  For the ability to use Form 1095-B as an alternative to Form 1095-C for an individual who was not an employee on any day of the calendar year, see the instructions for Forms 1094-C and 1095-C.

11. How does an ALE member complete its authoritative transmittal Form 1094-C and Form 1095-C if the ALE member is eligible to use the Qualifying Offer method?

If an ALE member has made a Qualifying Offer for all 12 months of the year to one or more full-time employees (and the employee did not enroll in self-insured coverage), the ALE member may use an alternate reporting method for those employees who received a Qualifying Offer for all 12 months of the year. A “Qualifying Offer” is an offer that satisfies all of the following criteria:

      • an offer of minimum essential coverage that provides minimum value;
      • the employee cost for employee-only coverage for each month does not exceed 9.5 percent of the mainland single federal poverty line divided by 12; and
      • an offer of minimum essential coverage is also made to the employee’s spouse and dependents (if any).

On the Form 1094-C, Line 22 Certifications of Eligibility, the ALE member should check box A, Qualifying Offer Method. On Form 1095-C, line 14, the ALE member should enter code 1A, Qualifying Offer, for each employee receiving a Qualifying Offer for all 12 months of the year. When an employee receives a Qualifying Offer, no entry is required in line 15, Employee share of Lowest Cost Monthly Premium for Self-Only Minimum Value Coverage.

The Form 1095-C must be filed with the IRS; however, as an alternative to furnishing the employee with a copy of Form 1095-C filed with the IRS, the employer may furnish a statement containing certain information and stating that because the employee received a Qualifying Offer for all 12 months of the year, the employee is not eligible for the premium tax credit. This alternative may not be used by an employer that sponsors a self-insured plan with respect to any  employee who has enrolled in the  coverage under the plan because the employer is required to report that coverage on Form 1095-C.  In that case the employer must furnish a copy of the Form 1095-C as filed with the IRS which will include enrollment in coverage information (Part III) as well as offer of coverage information (Part II).

For additional details on the reporting rules for a Qualifying Offer, including the contents of the alternative statement, see section 6056 regulations and the instructions for Forms 1094-C and 1095-C.

12. How does an ALE member complete its Authoritative Transmittal, Form 1094-C and Form 1095-C if the ALE member is eligible to use the Qualifying Offer Method Transition Relief for 2015?

For the 2015 calendar year, an ALE member that certifies it made Qualifying Offers for one or more months of 2015 to at least 95% of its full-time employees may qualify for simplified reporting procedures. An ALE member using this method for 2015 should check box B on line 22 of Form 1094-C and should enter code 1A, Qualifying Offer, on line 14 of Form 1095-C for any month for which an employee received a Qualifying Offer, or code 1I, Qualifying Offer Transition Relief 2015, for any month for which an employee did not receive a Qualifying Offer. No entry is required on line 15 of Form 1095-C.

The Form 1095-C must be filed with the IRS, however, an ALE member using this Qualifying Offer reporting method for 2015 may also provide employees with an alternative statement instead of providing them with a copy of Form 1095-C. This alternative furnishing method may not be used by an employer that sponsors a self-insured plan with respect to any employee who has enrolled in self-insured coverage under the plan because the employer is required to report that coverage on Form 1095-C.  In that case the employer must furnish a copy of the Form 1095-C as filed with the IRS which will include enrollment in coverage information (Part III) as well as offer of coverage information (Part II).

For additional details on the reporting rules available for Qualifying Offers made in 2015, including the contents of the alternative statement, see section 6056 regulations and the instructions for Forms 1094-C and 1095-C.

13. How does an ALE member complete its authoritative transmittal, Form 1094-C and Form 1095-C if the ALE member is using the 98 percent offer method?

An ALE member that, for all months of the calendar year, has offered affordable health coverage providing minimum value to at least 98% of its employees for whom it is filing a Form 1095-C employee statement, and offered minimum essential coverage to those employees’ dependents, may qualify for simplified reporting procedures. Note that for purposes of the 98% offer method, an offer to an employee’s spouse is not required.

If an ALE member is using this method, it should check box D, 98% Offer Method, on line 22 of Form 1094-C. The ALE member is not required to determine whether all of the employees for whom it is filing were full-time employees and therefore, is not required to complete Form 1094-C, Part III (b), Full-Time Employee Count for ALE Member, on its authoritative transmittal.  However, the ALE member is required to file Forms 1095-C on behalf of all employees taken into account in satisfying the 98% offer method. (For this purpose, the health coverage is affordable if the ALE member meets one of the section 4980H affordability safe harbors.)

For further details on the 98 percent offer method, see the section 6056 regulations and the instructions for Forms 1094-C and 1095-C.

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Reporting for Governmental Units

 

14. How does a governmental unit that has been designated to report on behalf of another governmental unit that is an ALE member complete Form 1094-C and Form 1095-C? 

A governmental unit (defined as the government of the United States, any State or political subdivision thereof, or any Indian tribal government (as defined in section 7701(a)(40)) or subdivision of an Indian tribal government (as defined in section 7871(d)), may report under section 6056 on its own behalf or may appropriately designate another person or persons to report on its behalf.  A person may be appropriately designated to file the return and furnish the statements under section 6056 on behalf of the ALE member if the person is part of or related to the same governmental unit as the ALE member. A government entity that is designated to file for another governmental unit is referred to as a Designated Government Entity (DGE).

If a DGE is designated to file returns on behalf of more than one ALE member, the DGE must file a separate Form 1094-C for each ALE member for which the DGE is reporting.  On lines 9-13 of Form 1094-C, Part I,  the DGE would report its name, address and EIN and on lines 1-8 the name, address, and EIN of the ALE member for which it is reporting. Contact names and telephone numbers must be provided for both the ALE member and the DGE. Additionally, the regulations require that there be a single identified Form 1094-C Authoritative Transmittal reporting aggregate employer-level data for the ALE member (including full-time employees of the ALE member the reporting for which has been transferred to a DGE), and that there be only one Form 1095-C for each full-time employee of the ALE member with respect to employment with that ALE member.  For additional details, see the instructions to Forms 1094-C and 1095-C.

15. What forms do a DGE and the designating governmental unit use to report the required information?

A governmental unit and a DGE should use Form 1094-B, Transmittal of Health Coverage Information Returns, and Form 1095-B, Health Coverage, or Form 1094-C and Form 1095-C, as follows:

(A)  An Ale member with an insured employer-sponsored health plan (or options under the employer-sponsored health plan that are insured) that has delegated to a DGE the responsibilities for reporting the offer of coverage (section 6056) information.

In this case, the DGE must report the offer of coverage information using a Form 1094-C and a Form 1095-C for each employee for whom the governmental unit has delegated the reporting to the DGE.  The Form 1094-C and Form 1095-C will identify the ALE member as the employer and the DGE as the entity filing on behalf of the governmental unit, so that the DGE must file a separate Form 1094-C for each ALE member that has delegated the reporting responsibility to the DGE.  The DGE is responsible for furnishing each employee a copy of the Form 1095-C filed for that employee.  Because the employer-sponsored health plan is an insured group health plan (or the employee has elected an option under the employer-sponsored health plan that is an insured option), the insurance company will report the enrollment in coverage information on a Form 1094-B and Form 1095-B, and furnish a copy of the Form 1095-B to each employee for whom a Form 1095-B was filed.  

(B)  ALE member with a self-insured employer-sponsored health plan (or options under the group health plan that are self-insured) that has delegated to the DGE the responsibilities for reporting the offer of coverage (section 6056) information and the enrollment in coverage (section 6055) information.

In this case, the DGE must report the offer of coverage information and the enrollment information using a Form 1094-C and a Form 1095-C for each employee for whom the governmental unit has delegated the reporting to the DGE.  The Form 1094-C and Form 1095-C will identify the governmental unit as the employer and the DGE as the entity filing on behalf of the governmental unit, so that the DGE must file a separate Form 1094-C for each governmental unit that has delegated its reporting responsibilities to the DGE.

(C)  ALE member with a self-insured employer-sponsored health plan (or options under the group health plan that are self-insured) that has delegated to the DGE the responsibilities for reporting the enrollment in coverage (section 6055) information but NOT the offer of coverage (section 6056) information.

In this case, the DGE will report the enrollment information on Form 1094-B and a Form 1095-B.  The Form 1094-B will identify the DGE as the filer and the Form 1095-B will identify the DGE as the Issuer or Other Provider in Part III. The DGE is responsible for furnishing the employee a copy of the Form 1095-B filed for that employee.  Because the governmental unit did not delegate its responsibilities for reporting the offer of coverage information, the governmental unit must report the offer of coverage information on a Form 1094-C and a Form 1095-C for each full-time employee, and not complete Form 1095-C, Part III (since the enrollment information will be provided by the DGE on a Form 1095-B).

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Reporting Offers of COBRA Coverage

 

16.  How should an ALE member complete Part II of Form 1095-C for a full-time employee who terminates employment during a calendar year and receives an offer of COBRA continuation coverage?

The answer to this question is currently being revised.  Please check back later for the updated response. (02/22/2016)  

17. How should an ALE member complete Part II of Form 1095-C for an ongoing employee who receives an offer of COBRA continuation coverage due to a reduction in hours?

The answer to this question is currently being revised.  Please check back later for the updated response. (02/18/2016)

18. How should an employer that sponsors a self-insured plan report coverage of spouses and dependents of an employee who separately elect to receive COBRA coverage? 

In some circumstances, a current or former employee’s spouse and dependents may be offered COBRA continuation coverage and be entitled to make an independent election to enroll in COBRA continuation coverage, for example if the employee is deceased or elects not to enroll. An employer that sponsors a self-insured plan should report coverage of each non-employee spouse and dependent who separately elects COBRA continuation coverage on a separate Form 1095-B (or Form 1095-C; see question 10 above). By contrast, if a spouse (or former spouse) or dependent receives COBRA continuation coverage because the employee or former employee has elected COBRA continuation coverage that also provides coverage to the spouse and/or dependent (for example, family coverage), the coverage of the employee, spouse and dependents should be reported together on the same Form 1095-C or Form 1095-B that is provided to the employee or former employee.

Example 1: Keri was a full-time employee of ABC Corporation and effective for the plan year beginning January 1, 2015, elected to receive self-and-spouse coverage under the self-insured ABC Corporation health plan covering herself and her spouse, Gerald. On May 15, 2015, Keri and Gerald divorce and Gerald loses eligibility for coverage under the plan.   ABC Corporation makes an offer of COBRA continuation coverage to Gerald, who elects to enroll in the COBRA continuation coverage and remains enrolled from May 15, 2015 through December 31, 2015.

ABC Corporation should report Keri’s enrollment on Part III of Form 1095-C by reporting that Keri was enrolled in minimum essential coverage in January 2015 through May 2015, and that Gerald had coverage (due to Keri’s enrollment in coverage providing coverage to a spouse) for the months January through May 2015. 

For the period June through December 2015, Gerald should receive a separate Form 1095-B or Form 1095-C reporting him as enrolled in minimum essential coverage under ABC Corporation’s self-insured health plan.

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Page Last Reviewed or Updated: 22-Feb-2016

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