Not only does the government require some employers to offer health insurance, but employers have to report that offer of coverage, too. Reporting is different for 1095 C-form and 1095 B-form employers. So let’s go over what you need to know to file these forms with the Internal Revenue Service (IRS), whether you’re a large or small employer.

Small business owner overwhelmed with paperwork

Tips on 1095-C Forms and1095-B Forms

This article covers some of the basics of IRS 1095-C form and 1095-B form and their corresponding pieces: Forms 1094-C and 1094-B. To help you keep track of how these different forms work, here are some things to keep in mind.

  • The ‘C’ forms: Forms 1095-C and 1094-C are filed together. These forms apply to applicable large employers (ALEs), which are employers with 50 or more full-time equivalent employees (FTEs). Learn how to calculate FTEs.
  • The ‘B’ forms: 1095-B and 1094-B are filed together. These forms usually apply to self-insured employers with fewer than 50 FTEs.
  • The 1095 forms are used to report information on an employer’s total health coverage offers and enrollment. The 1094 forms are used to transmit the individual employee information reports. Think of the 1094 form like a fax cover sheet and the 1095 form as the actual document that has the details.
  • Why is the 1095-C form talked about before the 1095-B form? The main reason is that some of the basic concepts of health insurance laws for employers apply mainly to ALEs, which use the ‘C’ forms. So we would like you to understand these concepts up front as you progress through the article.

IRS-Form-1095CWhat is the 1095-C Form?

IRS 1095-C is called the Employer-Provided Health Insurance Offer and Coverage form. It’s used by applicable large employers (ALEs) to report information on health insurance offered to employees—usually full-time employees. This form can also be used to report health coverage information for nonemployees, such as spouses or dependents. ALEs must also give each employee a 1095-C form that has the same information submitted to the IRS.

An ALE would report an offer of group health coverage to the IRS if it had an average of 50 or more FTEs during the previous year. For example, if your company had an average of at least 50 FTEs during 2016, your company is considered an ALE for 2017.

Why ALEs Must Offer and Report Health Coverage

There are 2 main Affordable Care Act (ACA) provisions that require ALEs to offer minimum essential coverage and report information about the coverage.

  1. Employer shared responsibility provision: This provision implemented the employer mandate, which requires that ALEs 1): Offer minimum value, affordable health insurance to full-time employees and eligible dependents or be subject to tax penalties. And 2): Report information to the IRS about whether health coverage was offered to full-time employees and their dependents, and submit a copy of each employee’s information return to that employee. The information on forms 1094-C and 1095-C is used to determine whether payments are owed under this provision. The ACA 1095-C form is also used to determine whether employees are eligible for premium tax credits.
  2. Employer information reporting provision for offers of minimum essential coverage: This law requires that self-insured employers (regardless of workforce size) report information on minimum essential coverage offered to employees and their spouses and dependents. Self-insured employers who are also ALEs are subject to both the information reporting requirements under this provision and the employer shared responsibility provision.

IRS-Form-1095BWhat is the 1095-B Form?

IRS 1095-B is called the Health Coverage form. It’s used to report certain information to the IRS and to employees about individuals who are enrolled in minimum essential coverage. Covered individuals include employees and their spouses and dependents.

The Health Coverage form is typically used by 2 main groups:

  1. Self-insured business owners with fewer than 50 FTEs—known as non-ALEs.
  2. Health insurance issuers and carriers.

For this article, we will focus on how the 1095-B form applies to self-insured non-ALEs.

One of the main differences between 1095-C form and 1095-B form employers is that small business owners with fewer than 50 FTEs who qualify to use the ACA 1095-B form are not required to offer health insurance to full-time employees and dependents. However, self-insured non-ALEs who offer minimum essential coverage must submit information returns to the IRS and to each covered individual (usually the insured employee or other responsible individual).

1095-C Instructions and 1095-B Instructions for Filing

The information below is an overview of the filing requirements for the 1094-C and 1095-C forms, which apply to applicable large employers (ALEs), and the 1094-B and 1095-B forms, which typically apply to self-insured non-ALEs. You may use these basic instructions as a starting point in understanding the requirements for submitting 1095-C form and 1095-B form information returns.

IRS-Form-1094C1094-C and 1095-C Instructions

Form 1095-C for employers is filed together with form 1094-C. The 1094-C form is called the Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. It’s used to report to the IRS summary information for each ALE member and to transmit the 1095-C forms. An ALE:

  • Must file its own 1094-C and 1095-C forms under its own separate employer identification number (EIN).
  • Can choose to file one or multiple 1094-C forms. If multiple 1094-C forms are filed, the ALE must check a box to label one as the “Authoritative Transmittal.” An ALE must still check the box for this label even if a single 1094-C form is filed.
  • Must mail an employee his or her copy of form 1095-C, unless the employee agrees to receive an electronic copy.

Reporting differs between ALEs that don’t self-insure their own group health insurance and those that do.

  1. Non-self-insured ALEs: Report offers of health insurance and enrollment in coverage for each employee who was full-time any month during the calendar year using forms 1094-C and 1095-C.
  2. Self-insured ALEs: Report information on any employee (including any covered spouse and dependents) who enrolls in health coverage, whether or not the employee is a full-time employee for any month of the calendar year. These employers can file using the 1094/95-C forms for both employees and nonemployees. But there’s the option to file information for nonemployees using forms 1094/95-B instead of completing form 1095-C, Part III (the section that applies to nonemployees).

The IRS provides detailed 1094-C and 1095-C instructions.

IRS-Form-1094b1094-B and 1095-B Instructions

Self-insured non-ALEs use the 1094-B Transmittal of Health Coverage Information Returns to file form 1095-B for employers. Self-insured employers using the ACA 1094-B and 1095-B forms must follow these instructions.

  • File information returns on any individual who had minimum essential coverage during the calendar year.
  • If an employer provides more than one type of minimum essential coverage plan, such as a self-insured major medical plan and a health reimbursement arrangement (HRA), to an individual for any month, the employer is required to report coverage only for one type for that month.
  • If an employee enrolls in both the self-insured major medical plan and the HRA program provided by the same employer, the employer is not required to report the employee’s coverage under the HRA for months when the employee is enrolled in both plans.

View detailed 1094-B and 1095-B instructions from the IRS.

How to File IRS 1095-C Forms and 1095-B Forms

There are 2 ways to file IRS forms 1094-C and 1095-C for ALEs and forms 1094-B and 1095-B for self-insured non-ALEs:

  1. Paper filing: Employers filing fewer than 250 information returns during the calendar year can use this method if they choose. However, the IRS encourages electronic filing.
  2. Electronic filing: Filers of 250 or more information returns during the calendar year must file electronically through the ACA Information Returns (AIR) program. The requirement of 250 or more applies individually to each type of form. Employers filing fewer than 250 information returns can also file electronically, but it’s not a requirement. However, the IRS encourages electronic filing.

IRS Deadlines for Filing 1095-C forms and 1095-B forms

ALEs that use both forms have the same deadlines for paper and electronic filing.

  1. Paper filing deadline: Forms are usually due on or before February 28 of the year following the calendar year of coverage.
  2. Electronic filing deadline: Forms are due on or before March 31 of the year following the calendar year of coverage.

These dates are the 2017 deadlines for filing forms to report coverage provided in the 2016 calendar year. If a deadline falls on a Saturday, Sunday, or legal holiday, the deadline will be the next business day.

1095-C Form and 1095-B Form Filing Deadline Extension

ALEs and self-insured small employers can file Form 8809 with the IRS. They should file on or before the due dates for forms 1094/95-C and 1094/95-B to get an automatic 30-day extension. You can complete Form 8809 on paper or online through the IRS Filing Information Return Electronically (FIRE) System.

Deadline to Furnish Employees With 1095-C Forms or 1095-B Forms

The deadline to furnish employees with form 1095-C for employers or IRS 1095-B has been extended from January 31, 2017, to March 2, 2017.

Now that you have some basic instructions on how to complete the 1095-C forms and 1095-B forms as well as their corresponding pieces, you may be ready to start filing your information returns with the IRS. You may need to consult a tax or legal professional for this. HealthMarkets licensed insurance agents cannot give tax filing advice. A HealthMarkets agent can, however, help with your small group health insurance needs. We’ll work with you and your employees one on one to provide cost-saving solutions. Call us any time at (800) 976-5818 to connect with a local agent today.

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References

Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances.

https://www.irs.gov/affordable-care-act/employers/information-reporting-by-applicable-large-employers
https://www.irs.gov/affordable-care-act/employers/aca-information-center-for-applicable-large-employers-ales
https://www.irs.gov/pub/irs-pdf/i109495c.pdf
https://www.irs.gov/pub/irs-pdf/i109495b.pdf
https://www.irs.gov/pub/irs-pdf/f1095c.pdf
https://www.irs.gov/pub/irs-pdf/f1094c.pdf
https://www.irs.gov/pub/irs-pdf/f1095b.pdf
https://www.irs.gov/pub/irs-pdf/f1094b.pdf
https://www.irs.gov/affordable-care-act/employers/information-reporting-by-providers-of-minimum-essential-coverage
https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act
https://www.irs.gov/instructions/i109495c/ar01.html
https://www.irs.gov/affordable-care-act/employers/questions-and-answers-about-information-reporting-by-employers-on-form-1094-c-and-form-1095-c

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