The IRS recently issued final versions of the new Forms 1094-B, 1095-B, 1094-C and 1095-C, along with related final Instructions. These forms are for reporting of coverage in 2014, but are expected to be similar for reporting for 2015.
The IRS had previously issued draft forms, which were covered in our September 2014 blog post. As a reminder, employers with 50 or more “full-time” employees (called “applicable large employers” (ALEs)) will be required to report coverage for their employees on Forms 1094-C and 1095-C starting in 2016, for coverage in 2015.
In addition to several technical reporting updates and clarifications, the final Instructions to Forms 1094-C and 1095-C include the following changes and clarifications:
- Employers covering individuals who are not employees for any part of the year (e.g., retirees, COBRA beneficiaries, or non-employee directors) can report coverage for these individuals on either Form 1095-C, or Forms 1094-B and 1095-B.
- If a full-time employee works for more than one affiliated employer within the same year, the employee generally should receive a separate Form 1095-C from each employer; however, if the employee works for two or more of the affiliated employers within the same month, the one for which the employee works the most hours should be treated as the employer for that month.
- If the employer uses the “qualifying offer method” or “qualifying offer method transition relief” to simplify reporting, the alternative reporting method may only be used for employees who do not enroll in coverage. Employees who enroll in coverage must be provided the Form 1095-C (the draft Instructions had indicated that all employees given a qualifying offer could receive the alternative information).
- To qualify for the “98% Offer Method” relief, an employer must provide (a) affordable health coverage providing minimum value to at least 98% of employees for whom it files a Form 1095-C and (b) minimum essential coverage to their dependents.
- Employers may report their total employee count on Form 1094-C based on (as in the draft Instructions) the first or last day of each month, or (new in the final Instructions) the first or last day of the first payroll period beginning in the month – provided that the last day of the applicable payroll period falls within the same calendar month in which it starts.
- If two or more employees of the same employer are spouses or employee and dependent, and are enrolled under one of the employees’ coverage, enrollment information should only be reflected on the Form 1095-C for the employee who enrolled, reporting the other family member(s) as covered individual(s).
- For reporting purposes, an offer to a spouse includes an offer that is subject to a reasonable, objective condition (e.g., requiring that the spouse not have access to health coverage from another employer).
- An employee who is treated as being offered coverage under one of the transition relief methods offered for 2015 is treated as being offered minimum essential coverage.
In addition, the final regulations note that an employer with between 50 and 99 employees that is exempt from penalties under the “employer mandate” in 2015 is still required to file Forms 1094-C and 1095-C for 2015.
The attached article updates our prior summary of the reporting requirements for ALEs to reflect the final Instructions for Forms 1094-C and 1095-C.