Form 1095 FAQs - ACA Reporting & Employee Benefits Compiance
If you are struggling with ACA reporting forms 1095 and 1094, you’re not alone. Form 1095 is the first new major tax form to be introduced in the U.S. in more than 70 years, making it a significant source of concern for many employers.
Rest assured, with the new deadline of March 31st, 2016 to distribute 1095 forms to your employees, you still have time, but you do need to get moving. And since the arrival of the forms in the mail may raise questions, we recommend that you proactively reach out to your workforce to help them understand what they'll be receiving.
Here are just a few of the more commonly asked questions we’ve been fielding. Please don’t hesitate to reach out for more comprehensive answers on these and any other questions you might have.
Q: What deadlines do I need to meet?
A: On December 28, 2015 the IRS extended the due dates as follows: Distribute 1095 forms to employees (March 31, 2016), File 1095 forms with the IRS (May 31, 2016 for paper, June 30, 2016 for electronic filing).
Q: How many types of 1095 forms are there?
A: There are three. The 1095-A form is provided by insurance companies to anyone who receives coverage from a health care exchange. The 1095-B form is provided by employers with less than 50 FTEs who offer self-funded health coverage, and the 1095-C form is provided by employers with 50 or more FTEs.
Q: Can employees file their tax returns without their 1095 form(s)?
A: Absolutely, and we encourage you to proactively let your employees know this. If you are looking for some help with how best to message this, give us a call. We have a library of best-practice communications at your disposal.
Q: What is the difference between form 1095-C and 1094-C?
A: The main difference between these forms is that the 1095-C provides information about health insurance and is sent to both employees and the IRS, while the 1094-C acts as a cover sheet about the 1095-C and is sent only to the IRS.
Q: Which of my employees should be sent a 1095-C form?
A: If you are an employer with 50 or more FTEs, than all employees eligible for coverage should get a 1095-C, regardless of whether they actually participated in your health plan.
Q: Which of my employees should be sent a 1095-B form?
A: If you are an employer with less 50 FTEs who provides self-funded health coverage, than all employees who accepted coverage should get a 1095-B. (Unlike form 1095-C, you need not send it to anyone who declined coverage.)
Q: Can I file my forms on paper or must I do so electronically?
A: Employers with fewer than 250 forms to send to the IRS can file paper 1095-C forms, accompanied by a paper 1094-C. They can also file electronically. Employers with 250 or more forms MUST transmit the information electronically.
Q: Are any employers free from filing 1095-B and 1095-C forms?
A: Yes. Employers who are exempt from the employer mandate, under the ACA (less than 50 FTEs) do not have to file, providing they either did not offer insurance to their employers, or they only offered fully-insured plans.
We hope these FAQs have been helpful but they are admittedly just a start. Please don’t hesitate to reach out for more comprehensive answers on these and any other questions you might have. As part of our standard services, we have ACA compliance experts ready to lend a hand with both English and Spanish marketing communication materials you can use to explain these new tax forms to your employees. We can also help guide you through the steps required to complete and file these forms with the IRS.