THREE COMMON 1095-C ERRORS
FORMs 1095-C are specific to each individual employee of an APPLICABLE LARGE EEMPLOYER [ALE] with full-time status for at least one month of the reporting tax year.
PART II of FORM 1095-C identifies for each month whether an offer of coverage was
made to the employee, the employee’s own contribution amount [for self-only coverage],
and an IRS CODE denoting this offer and coverage status of the employee.
FORMs 1095-C are completed and sent to employees by the ALE, who then also submits
them to the IRS along with the transmittal form. If an employee has full-time status for at
least one month, all months must be coded on the form.
Three common FORM 1095-C pitfalls and questions are addressed below.
- LINE 16 must never be left blank if an applicable IRS CODE is available. If an offer of coverage qualifies as AFFORDABLE but is waived by the employee, the employer should still enter an AFFORDABILITY CODE. If CODE 1A (Qualifying Offer) is entered in LINE 14, then enter CODE 2G (Federal Poverty Line Safe Harbor) in LINE 16 (even if the instructions seem to indicate a code is not necessary].
- SHORT-TERM EMPLOYEES working 30 or more hours per week are considered full-time employees under the ACA, even if they only work 3 or 4 months and however classified (for example, short-term, temporary, interns, or co-op employees). They are NOT considered VARIABLE HOUR EMPLOYEES.
- SELF-EMPLOYED INDIVIDUALS are NOT considered W-2 employees for ACA employer mandate purposes, and no FORM 1095-C is required. SELF-EMPLOYED STATUS includes sole proprietors, partners in a partnership, and 2% S corporation shareholders.
If you have questions regarding IRS CODING and the completion of FORM 1095-C or any other aspect of ACA reporting & compliance, please contact BENEFITSCAPE, the leading ACA specialist.
BENEFITSCAPE provides best-in-class ACA services & intelligent FLAG & FIX REGTECH DIAGNOSTICS to 1000s of employers of all sizes, in all sectors, and on all major HCMs.