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Tax Tip Tuesday: New Health Care Coverage Reporting Requirements for Large Employers

Form 1095-C

Today we will address the new reporting requirements for large employers concerning health coverage.

List of Reporting Guidelines from the IRS:

  • Under the health care law, applicable large employers (ALE) are employers with 50 or more full-time employees, including full-time equivalent employees, in the preceding year. They are required to report some information regarding health coverage by filing information returns with the IRS and furnishing statements to full-time employees.

  • For further guidance on whether you are an ALE, check out these Tax Tip Tuesday Blogs: Employer Mandate Part 1 and Employer Mandate Part 2.

  • ALEs must report information about health coverage offered to each full-time employee, or show that they didn’t offer coverage to the full-time employee. This information will help the IRS determine whether an ‘employer shared responsibility payment’ applies to the organization. This is also used in determining the eligibility of employees for the premium tax credit.

Key Points about the Information Reporting Requirements:

  • They are required to report certain information to the IRS, as well as to all of their full-time employees, regardless of whether they offer health insurance coverage.​

  • These ALE reporting requirements are new. The first information reporting returns are due in 2016 for the year 2015.

The New IRS Forms for ALEs:

  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage — is used to report information about each full-time employee and is the form that is furnished to full-time employees. This form needs to be furnished to each full-time employee by January 31. (January 31, 2016 is a Sunday so the filing date is extended to February 1, 2016).

  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns — is used to report to the IRS summary information and to transmit Forms 1095-C to the IRS. This form is the transmittal form for the Forms 1095-C and must be filed by February 28 if paper filed. (February 28, 2016 is a Sunday so the filing date is extended to February 29, 2016) If you file electronically, the filing date is March 31, 2016.

  • Even if you’re an ALE that is not liable for an employer shared responsibility payment because of transition relief, you still have to comply with the information reporting requirements for 2015. You use the reporting forms to communicate to the IRS that you are eligible for transition relief under the employer shared responsibility provisions.

  • If you’re an ALE that sponsors a self-insured group health plan for your employees, you also must report information about employees and their dependents who enroll in the coverage, whether or not the employee is a full-time employee.

How to Report:

  • If you file 250 or more information returns during the calendar year, you must file Form 1095-C and Form 1094-C with the IRS electronically.

  • You will meet your requirement to furnish a statement to your full-time employees if you provide each full-time employee with a copy of the Form 1095-C that you file with the IRS. Statements must be furnished to employees on paper by mail or hand delivered, unless the recipient affirmatively consents to receive the statement in an electronic format.

The following are links to some questions and answers concerning this on the IRS website and also to the actual forms:

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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