It’s common for The Affordable Care Act (ACA) to raise compliance questions for many organizations. One common question is regarding IRS Forms 1094 and 1095.
Both of these forms are filed to record the employer-provided health insurance coverage that is required under the ACA. The difference? Like many things ACA-related, it can be difficult to understand. So, let’s dive in a little deeper.
Section 6055 states Form 1094 must be provided to the IRS to report minimum essential health care coverage and a Form 1095 to each covered individual.
Purpose: This is a reporting form that provides information to the IRS about health insurance coverage the employer provides.
Form is provided to: The IRS by either the health insurance carrier or self-insured plan sponsor.
Deadline: Per the IRS, “Generally, you must file Forms 1094-C and 1095-C by February 28 if filing on paper (or March 31 if filing electronically) of the year following the calendar year to which the return relates.”
1094-B vs. 1094-C: If you provide fully-insured health coverage to your employees, no matter the size of your business, 1094-B will be completed for you by your carrier. Form 1094-C is a requirement for Applicable Large Employers (ALE), or those with 50 or more full-time equivalent employees.
Who is responsible: Form 1094-B will be completed by the carrier or plan sponsor. Form 1094-C is completed by the employer or members of the Applicable Large Employer (ALE).
Section 6056 states Form 1095 must be provided to the IRS and employees about the health insurance coverage that was offered by the employer.
Purpose: This is the employee statement that is provided to help provide information around tax time about employee eligibility for tax credits.
Form is provided to: The IRS and covered employees.
Deadline: Per the IRS, “Generally, the return and transmittal form must be filed with the IRS on or before February 28 if filing on paper (March 31 if filing electronically) of the year following the calendar year of coverage.”
1095-B vs. 1095-C: If you provide fully-insured health coverage to your employees, no matter the size of your business, 1095-B will be completed and provided to you by your carrier. 1095-C is a requirement for Applicable Large Employers (ALE), or those with 50 or more full-time equivalent employees. In this case, your enrolled employees will receive both Forms 1095-B and 1095-C.
Who is responsible: Form 1095-B will be completed by health insurance carriers with respect to all insured coverage not reported by the Exchanges (Exchanges use 1095-A) and Non-ALE plan sponsors of self-insured group health plan coverage. Form 1095-C is completed by Applicable Large Employers (ALEs). For ALEs sponsoring self-insured plans, the final regulations generally provide for combined reporting on a single form (Form 1095-C).
Due date extension for furnishing statements.
The IRS recently released Notice 2020-76 extending relief to employers from some of the reporting requirements under the employer mandate for the 2020 reporting year. Click the link below to read our recent blog on this topic:
See below links for additional blogs on the Affordable Care Act (ACA):
More information is available at IRS.gov. See below links to the IRS reporting instructions for forms filed in 2021 reporting coverage provided in calendar year 2020:
How PrimePay can help ensure compliance.
Our ACA Compliance Navigator solution helps with variable hour employees, filing and providing IRS Forms 1094/1095, and providing penalty exposure warnings, checklists, and more. Contact us in the form below to learn more.
Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.
Editor’s Note: This post was originally published in July 2016 and has been updated for freshness, accuracy, and comprehensiveness.