The 7 Most Frequently Asked Questions Regarding Form 1095-C
It’s almost that time of year, the ACA reporting season! Have you heard that there will be no extension for the recipient copy deadline this year? While the recipient copy deadline is January 31, the IRS has extended this deadline until March 2.
This will not be the case for the 2021 tax year, the IRS is not providing any automatic extension.
Without this additional time to file, your plan has probably changed and ACA reporting has moved up on your list of priorities.
To help you get started on the ACA reporting journey, here are the most frequently asked questions that our team gets concerning IRS Form 1095-C. These are both questions from our clients and the questions that their own employees ask them.
What is Form 1095-C?
Let’s start with the most basic questions, what is this form?
Form 1095-C was designed by the IRS to capture enough information about the employer’s offer of health insurance coverage to verify that these employers are in fact meeting the ACA requirements for minimum essential coverage.
Form 1095-C is filed by applicable large employers with 50 or more full-time or full-time equivalent employees.
Why is it so important to prove I had minimum essential coverage?
It is important that employers can verify that they offered health insurance coverage that meets the quality standards of the Affordable Care Act to all eligible employees. It is also important for employees to be able to prove that they were enrolled in quality health insurance for each month of the year.
If employers that are required to file Forms 1095-C to the IRS and distribute copies to their employees fail to do so, there will be repercussions. First of all the employer fails to maintain their IRS compliance.
Not providing this information to employees will cause issues for them as well. While the federal government no longer has an individual mandate, many states do. Your employees need a copy of Form 1095-C to verify that they met the state requirements.
What are the differences between 1095-B, and 1095-C?
These forms both report information related to health insurance coverage, therefore they are often confused with each other. Different organizations with different circumstances will file these forms differently. Here are a few examples.
Applicable Large Employers (ALEs) offering fully insured coverage will file Form 1095-C to report their health insurance information.
Employers with less than 50 employees, but that offer employer-sponsored, self-insured health coverage should file Forms 1095-B.
Government providers of health insurance coverage, insurance carriers, and other non-ALEs should file Form 1095-B.
What information is entered in Form 1095-C?
To file Form 1095-C correctly the following information must be reported:
- The name, address, and SSN of the covered individual.
- The name, address, EIN, and contact info of the plan provider.
- The offer of coverage code for each recipient/employee, broken down by month
- The recipient/employee’s premium share of coverage, by month.
- The employee’s age, plan start month, and Zip Code (For ICHRA Reporting).
- Any safe harbor relief codes that are applicable
- The covered individual’s spouse and dependent(s) information, if applicable (name, SSN or DOB, and months covered)
Do employees need to attach Form 1095-C to their tax return?
Our clients often ask us if their employees need a recipient copy to attach to their personal income tax return. The answer from the IRS is no. While your employee will use their recipient copy of Form 1095-C to complete their tax return, it does not actually need to be attached. The Form is for their knowledge and also for their records.
An employee needs to file their tax return, but has not received their Form 1095-C copy, what needs to be done?
With the information on Form 1095-C, the employee does not necessarily need the information to file their tax return. They are able to proceed with filing their tax return without a copy of Form 1095-B.
If the employee has not received a paper copy of the form, you may not have the correct address for them. ACAwise helps eliminate this issue by running all of your employees’ addresses against the USPS database to ensure they are valid.
Am I required to send a copy of Form 1095-C to the adult children included in my employee’s coverage plan?
No, it is not necessary or required by the IRS that you distribute copies to the spouses or children included on your employees’ plans. Employers are only required to provide a single copy of Form 1095-C. However, you can direct your employees to make a copy of their recipient copy to pass on to their adult children as needed.
There you have it, the most common questions asked about Form 1095-C! Now, are you ready to get started with ACAwise for your 2022 ACA reporting?
Our roster is filling up quickly, please reach out to our team at [email protected] or give us a call at 704.954.8420 today!