Form 1095-C, Line 16 Explained

What you need to know.

We just talked about how important line 14 is to complete Form 1095-C and now we get to tell you all about line 16 and its very own set of codes!

Form 1095-C, Line 16
So, like we said, line 14 takes care of telling the IRS what type of coverage you offered. Line 16 is there to explain further about your choice of code for line 14. So if there were any safe harbor situations you were eligible for or and other circumstances applied, Code Series 2 indicates that on line 16.

Tax Year 2016 Code Changes
Since code 2I of Code Series 2 only applied to safe harbor received in 2015, it is no longer available for 2016 filing. This means you won’t be able to use code 2I on line 16 on your future ACA forms (including the ones for this year).

Code Series 2
And so you’re armed with all the knowledge you need to complete line 16, here are the codes you’ll choose from when completing it:

• -Code 2A
• -Use if the employee was not employed during that month.
• -Do not use if the employee worked even one day that month.
• -Do not use for the month an employee was terminated.
• -Code 2B
• -Use if the employee was not a full-time employee during that month.
• -Use if the employee was not full-time and did not enroll in coverage.
• -Use if the employee was a full-time employee and their coverage ended only because the employee terminated employment.
• -Code 2C
• -Use if the employee enrolled in the coverage offered.
• -Do not use if code 1G is used in line 14.
• -Do not use if the coverage offered did not meet minimum essential coverage.
• -Do not use for months terminated employees are enrolled in COBRA continuation coverage.
• -Code 2D
• -Use if the employee was in a section 4980H(b) Limited Non-Assessment Period that month.
• -Use if the employee was in an initial measurement period that month.
• -Code 2E
• -Use for any month the multiemployer arrangement interim guidance applies.
• -Use in place of any other code in Code Series 2 that may apply.
• -Code 2F
• -Use if section 4980H Form W-2 safe harbor was used to determine affordability for the employee.
• -Code 2F must be used for all 12 months.
• -Code 2G
• -Use if section 4980H federal poverty line safe harbor was used to determine affordability for the employee.
• -Code 2H
• -Use if section 4980H rate of pay safe harbor was used to determine affordability for the employee.

Stay tuned with ACAwise for everything you need to complete your ACA reporting quickly, easily, and securely!

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Form 1095-C, Line 14 Explained

What you need to know.

When you’re completing Form 1095-C - whether for your own business or a client’s - it’s important to know what you’re in for. And just to get you prepared, line 14 is a pretty important one.

Form 1095-C, Line 14
You know how when you were coming up with health insurance coverage to offer your employees, you had to make sure it met Affordable Care Act guidelines regarding minimum essential coverage (MEC), minimum value (MV), and dependent coverage? Well, line 14 is where you get to show off you did that!

In line 14, you use a specific code for each month (or all 12 months!) that comes from the ACA Code Series 1. This code will tell the IRS if the coverage you offered met all necessary requirements.

Tax Year 2016 Code Changes
Things are a little different for Code Series 1 and, therefore, line 14 this year. For those of you keeping track of the differences between the 2015 and 2016 filing codes, code 1I was removed and codes 1J and 1K were added to include more coverage options.

Code Series 1
And, without further ado, here are the codes you can expect to choose from on your 2016 1095-C Forms:

• -Use code 1A if you made a Qualifying Offer to the employee and their spouse and dependent(s), if any. A Qualifying Offer provides MEC at MV and the Employee Required Contribution is no more than 9.5% of the mainland single federal poverty line, as adjusted.
• -Use code 1B if you offered MEC at MV to the employee only.
• -Use code 1C if you offered MEC at MV to the employee and their dependent(s) but not their spouse.
• -Use code 1D if you offered MEC at MV to the employee and their spouse but not their dependent(s).
• -Use code 1E if you offered MEC at MV to the employee as well as their spouse and dependent(s).
• -Use code 1F if you offered MEC that did not meet MV to the employee, spouse, dependent(s), or any combination of the three.
• -Use code 1G if you offered MEC for at least one month to a non-employee or a part-time employee. Keep in mind that code 1G must be used for all twelve months.
• -Use code 1H if you didn’t offer coverage to the employee.
• -Use code 1J if you offered MEC at MV to the employee and conditionally to their spouse but not to their dependent(s).
• -Use code 1K if you offered MEC at MV to the employee and their dependent(s) and conditionally offered it to their spouse.

Don’t forget to check out our next blog post on line 16 and the second set of codes you’ll need to complete Form 1095-C!

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DIY vs. Full-Service E-filing: The ACAwise Difference

Don’t let the Affordable Care Act’s uncertain future lull you into a false sense of security: filing for the 2016 tax year in early 2017 is very much still on. As in, you’re still likely to incur some serious fines if you don’t file.

So now that you know you have to file, how will you?

The Completely DIY Way
Well, you could file your return all by yourself. Surrounded by stacks of paper forms, filling them out one by one, before you take everything to a nearby IRS office (if there even is one near you) to ensure you did everything correctly.

Once you finally get to talk to someone at the IRS office - because, remember, the IRS is never not busy - they’ll help make sure your return has been filled out correctly but have no way to determine if the personal data you’ve collected on your employees (like their social security numbers) is accurate. And, remember, this past year one of the main causes of ACA form rejections was because of mismatched taxpayer identification numbers (TIN), like SSNs.

Once you’ve finished up at the IRS office, it’s time to head on over to the post office to mail all those IRS and recipient copies of your 1094 and 1095 Forms. And after you’ve mailed them, you’ll have to wait a while - a few weeks at least - to hear back that your return was accepted or rejected.

The ACAwise DIY Way
If you've finished your 1094 and 1095 Forms but don't want to deal with the crowds at the IRS office or the uncertainty of the post office, you can DIY e-file with ACAwise!

ACAwise is an IRS-authorized, cloud-based solution for applicable large employers and third-party administrators who need to file ACA compliance Forms 1094-B, 1095-B, 1094-C, and 1095-C.

If you already have completed PDFs of your ACA Forms, you can use ACAwise to e-file your forms directly with the IRS through our secure e-filing system. Simply upload your forms, review that everything looks okay, and transmit.

The ACAwise Full-Service Way
So, yeah, you could DIY your way through your ACA filing, or you can go big with full-service e-filing from ACAwise.

With Full-Service ACAwise, all you need to do to e-file your forms is input the personnel and health benefits details you already have, however you already have them, and we’ll take it from there.

We’ll generate the ACA codes necessary for your forms with the information you provide and input the rest of the information to completely create each form of your return. Then, we’ll send that data through a few error checks, like an IRS business rules validation.

Once your forms are nice and ready, we’ll let you know so you can review them before securely e-filing them directly with the IRS.

And when we say “full-service,” we mean FULL service: in addition to e-filing your forms with the IRS, we’ll also mail your recipient forms for you! Just indicate before you e-file that you’d like to include our postal mailing feature in your order, and we’ll print and mail them out by the next business day.

And if you have any questions at any point in your ACAwise process, we’re here to help! We offer free, round-the-clock customer support from right here in South Carolina, USA. You can give us a call (704-954-8420) or send us a live chat Monday through Friday, 9:00 a.m. to 6:00 p.m. EST, or send us an email anytime to support@ACAwise.com!

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How to Complete Your Year-End Filing with ACAwise

You won't believe how easy it is!

The year is beginning to draw to a close and you know what that means: it’s time to start preparing to file those Affordable Care Act Forms 1094 and 1095.

And there’s nowhere easier to file than right here with ACAwise!

First, if you’d like, we’ll start you off with a free demo of our program with one of our knowledgeable product managers so you can learn all the ins and outs of everything ACAwise can do. This’ll also give you the opportunity to ask any questions you may have about your filing or our program so you’re confident moving forward with the ACAwise process.

Once you’ve had your demo and your account has been set up, you’ll start by entering in the basic information of the employer(s) for whom you’re filing. Whether you’re an ALE and you’re just filing for yourself or your a third-party administrator filing for multiple employers, you can complete your ACA e-filing through ACAwise.

After all of your employer information is in, all you have to do next is upload their (or your) employee data in whatever file format it’s currently in! Once the employee information needed to complete your ACA Forms is input, ACAwise gets to work generating the ACA Forms 1094 and 1095.

Of course, if you've already gotten a head start and done it yourself, you can upload your completed 1094 and 1095 PDFs to e-file straight to the IRS!

Otherwise, while you sit back and relax, ACAwise will generate your IRS-authorized ACA Forms. Once they’re done, you review them and securely send them along to the IRS.

And before you e-file, you even have the option to add on postal mailing to your order! With postal mailing, we go a step further and take care of your employee/recipient copies for you. When you e-file, we’ll get the alert that you selected postal mailing, and begin printing and mailing your forms out by the next business day. They go out through the US Postal Service from our headquarters here in South Carolina, so your recipients should receive them within a few days after you e-file!

If you have any other questions about getting started and e-filing with ACAwise, we’d be happy to answer them! We’re available by phone (704-954-8420) and live chat Monday through Friday, 9:00 a.m. to 6:00 p.m. EST, and we provide 24/7 assistance through support@acawise.com.

Let us help make your 2016 ACA filing as easy as possible!

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2016 ACA Reporting Changes

Believe it or not, it’s time to start thinking about your 2016 ACA reporting as well as start making any changes needed to keep you compliant as we go into 2017!

But not everything’s going to be just as it was last year this time around. Even before the results of the election all but guaranteed the Affordable Care Act would face some serious scrutiny and changes in the upcoming months, there were changes already in place for the 2016 filing year.

And since we’re operating in a land where the ACA is still law, it’s up to us to help make sure you’re aware of these changes and are ready to file this coming January.

2016 Tax Year ACA Changes
First things first, two types of transition relief available in 2015 have changed for the 2016 tax year:

• -The Qualifying Offer Method Transition Relief, which was only available in 2015 for non-calendar year plans, is no longer available for the 2016 tax year.
• -The 4980H Transition Relief, which applied to employers who offered 70% of their full-time employees coverage, has been updated to only apply to employers who offered 95% of their full-time employees coverage in 2016.

These transition relief changes may affect your answer on Form 1094-C, line 22.

Keeping in theme with the form changes, there are also a few code changes to lines 14 and 16 of Form 1095-C for the 2016 tax year:

• -Code 1I won’t be used anymore and codes 1J and 1K have been added to include more scenarios for line 14.
• -Code 2I won’t be able to be used anymore on line 16.

Now for compliance. As you may have already picked up when we mentioned the 4980H Transition Relief, employers who were required to offer qualified coverage to 70% of their full-time employees in order to remain compliant in 2015 will need to up the ante: to 95% of their full-time employees. That is if you want to avoid that fine.

And speaking of that fine, it’s going up too. The annual penalty amounts for 2016 Play or Pay mandate failures have increased to $3,240 for sledgehammer penalties and $2,160 for tack hammer penalties.

The IRS isn't all mean, though: they're giving you an extra month to send out your employee/recipient copies of Form 1095-B or Form 1095-C. Initially, these forms were due out to your recipients by January 31, 2017, but now, they need to be mailed by March 2, 2017.

Of Course, ACAwise is Here to Help
ACAwise is a unique ACA solution in that we’re built to handle the ACA changes as they come! Since everything is backed by our IRS business rules validation process, you can be sure your data and forms are as compliant as possible. To learn more, just visit our website (or) set up a free, live demo with one of our friendly support team experts!

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