As TY2020 ACA Compliance and Reporting deadlines are fast approaching, refer to BenefitScape's Back to ACA Basics to brush up on the upcoming compliance process! Today we'll be reviewing Forms 1095-C and 1094-C:
Per the ACA Employer Mandate, Applicable Large Employers (ALEs) must offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees and their dependents that meets Minimum Value (MV) and is affordable for the employee. Otherwise, they are subject to Internal Revenue Code (IRC) Section 4980H penalties.
In addition, the ALEs must communicate this healthcare coverage offered to their benefit-eligible employees and for self-insured employers, the employees' dependents using Form 1095-C, which is supplied to the employee as well as the IRS. Along with the coverage offered, the document also summarizes the months of the year when the employee was eligible, the lowest-cost premium available to the employee for employee-only coverage, and notes which month(s) the employee was enrolled in coverage. This information is communicated on Form 1095-C on Lines 14,15, and 16 using various IRS code combinations. We'll be covering the various 1095-C code combinations in a future post. Stay tuned!
When filing the Form 1095-Cs via the IRS Affordable Care Act Informations Return (IRS AIR) platform, Form 1094-C must also be transmitted. Form 1094-C acts as a cover sheet and summarizes the information on the ALE’s Form 1095-Cs as well as details pertaining to the organization, such as EIN, contact infromation, and certifications of eligibility regarding the health insurance offered for a particular year. Specifically, Form 1094-C includes the ALE’s address, phone number, employer identification number, the total number of employees, a person to contact, the total number of 1095-C forms being filed, and any certifications of eligibility. There is also a field for MEC Indication, where the ALE must certify that they did or did not provide such coverage to their employees.
As mentioned above, failure to file, late filing, or non-compliance can result in hefty potential penalties from the IRS. BenefitScape can work with your organization to eliminate those risks and guarantee complete ACA Compliance from start to finish.
If you have any questions about your upcoming ACA Compliance and Reporting project, or would like to discuss prior year reporting, State-Mandated reporting, and more, please contact us at firstname.lastname@example.org to get started.
TY2020 ACA Deadlines:
March 2, 2021: Deadline to distribute Forms 1095-C to employees
March 31, 2021: Deadline to e-file Forms 1095-C and 1094-C via IRS AIR