Forms 1094/1095

Short Read

What You Need to Know

This task provides information on the 1094 and 1095 forms that are used to report information to the IRS relating to Section 6055 (Individual Mandate) and Section 6056 (Employer Shared Responsibility) under the Affordable Care Act (ACA).
The report provides information on individuals enrolled in minimum essential coverage during the year (Section 6055 reporting). It will be used to enforce the individual mandate and to determine who is eligible for premium credits in the exchange marketplace.
The information will be used to enforce the shared responsibility provisions of the ACA (play or pay) for applicable large employers (ALEs) and to determine who is eligible for premium credits in the exchange marketplace (Section 6056 reporting). The government needs to determine whether the ALE offered minimum essential coverage to full-time employees that was affordable and provided minimum value.
A Form 1095-C must be filed with the IRS for each employee (who was a full-time employee for any month of the calendar year) and can be aggregated along with the transmittal form 1094-C. 1095-C is also distributed to covered plan participants. Please note that employers who offer self-insured coverage must report on all individuals (regardless of full-time status) who received minimum essential coverage under the employer plan.
Certain reporting rules apply to employers in MEWAs, controlled groups, employers with collectively bargained plans, and governmental employers.

What You Need to Do

The insurer files Forms 1094-B and 1095-B and distributes statements to individuals for all fully insured health plans. A form 1095-B must be filed with the IRS for each individual to whom minimum essential coverage is provided and can be aggregated along with the transmittal form 1094-B. 1095-B is also distributed to the “responsible individual”. This is typically the covered employee or former employee.
Small, self-insured employers (generally those with less than 50 employees) file Forms 1094-B and 1095-B and distribute statements to individuals.
Large employers (generally those with 50 or more employees) file Forms 1094-C and 1095-C and distribute statements to individuals. This applies to large employers whether they offer insured plans, self-insured plans, or no health coverage. Note that only ALEs with self-insured plans need to compete Part III of Form 1095-C.Employers filing 250 or more 1095 forms must file electronically.
Review the reference material, which includes a complete list of all information that must be included on the report.
Review the reporting forms as these will provide greater detail on the Section 6055 and 6056 requirements.

When Is It Due?

The 1094/1095 reporting forms are due to the IRS on or before February 28 (March 31 if filed electronically) of the year following the calendar year in which it provided minimum essential coverage to an individual. An automatic 30-day extension of time to file is available if requested on or before the 1094/1095 due date. Filers may request an extension of time to file Forms 1094 & 1095 using Form 8809. Filers may request one additional extension, not to exceed 30 days, by submitting a second Form 8809 before the end of the first extension period. Note that this extension applies only to filing the 1094/1095 with the IRS. It does NOT extend the deadline for providing employee statements.

Why Comply?

The penalties for failure to file correct information returns and failure to provide correct payee statements range in the hundreds of dollars. Click here for the exact penalty amounts for these failures.
There is no maximum limitation if there is intentional disregard of the requirements to file the returns and furnish recipient statements.

Forms 1094-B and 1095-B

Purpose

The report provides information on individuals enrolled in minimum essential coverage during the year (Section 6055 reporting). It will be used to enforce the individual mandate and to determine who is eligible for premium credits in the exchange marketplace.
A form 1095-B must be filed with the IRS for each individual to whom minimum essential coverage is provided and can be aggregated along with the transmittal form 1094-B. 1095-B is also distributed to the “responsible individual”. This is typically the covered employee or former employee.

Information that Must Be Reported

Generally, the report will list covered plan participants who received minimum essential coverage.
The reference material includes a complete list of all information that must be included on the report.

Filing the Report with the IRS

The insurer files the report for all fully insured health plans. Please note that employers with 50 or more employees may have obligations for filing 1094-C and 1095-C (see below).
Self-insured small employers (with less than 50 employees) will furnish information to the IRS using Form 1095-B and the IRS transmittal Form 1094-B.
Large employers report this information on Forms 1095-C and 1094-C (see below).
Other reporting arrangements, such as those that cover employers in a controlled group, are allowed.

Filing Deadline

Forms 1094-B and 1095-B must be filed with the IRS on or before February 28 of the year following the year the coverage is provided (March 31, if filed electronically). (Example: deadline for paper filing is February 28, 2017 for reporting information on the 2016 calendar year.)
- An automatic 30-day extension of time to file is available if requested on or before the 1094/1095 due date. Filers may request an extension of time to file Forms 1094 & 1095 using Form 8809. Filers may request one additional extension, not to exceed 30 days, by submitting a second Form 8809 before the end of the first extension period. Note that this extension applies only to filing the 1094/1095 with the IRS. It does NOT extend the deadline for providing employee statements.
Note: Employers filing 250 or more 1095 forms must file electronically.

Distributing Statements to Individuals

Form 1095-B (or a similar statement) must be provided to a responsible individual for whom a Form 1095-B was submitted to the IRS. The responsible individual is the person who enrolls one or more individuals in minimum essential coverage and may be the primary insured, employee, former employee, uniformed services sponsor, parent, or other related person named on the coverage application. Typically, it will be the employee.
The entity responsible for distributing the statements to individuals is the same entity responsible for filing the report with the IRS.
If mailed, the statement must be sent to the responsible individual’s last known permanent address or, if no permanent address is known, to the individual’s temporary address. A reporting entity may furnish the statement electronically if specific requirements are satisfied.

Distribution Deadline

March 2Or the next business day, if the 30th day falls on a Saturday, Sunday, or legal holiday of the year following the year the coverage is provided.
- The regulations provide for an extension of time to furnish statements (up to 30 days) for a showing of good cause upon written application to the IRS. Note: unlike the extension request for filing Forms 1094/1095 with the IRS, requesting an extension of time to provide employee statements is not automatic.

Forms 1094-C and 1095-C

Purpose

The information will be used to enforce the shared responsibility provisions of the ACA (play or pay) for applicable large employers (ALEs) and to determine who is eligible for premium credits in the exchange marketplace (Section 6056 reporting). The government needs to determine whether the ALE offered minimum essential coverage to full-time employees that was affordable and provided minimum value.
A Form 1095-C must be filed with the IRS for each employee (who was a full-time employee for any month of the calendar year) and can be aggregated along with the transmittal form 1094-C. 1095-C is also distributed to covered plan participants. Please note that employers who offer self-insured coverage must report on all individuals (regardless of full-time status) who received minimum essential coverage under the employer plan.
In general, an offer of COBRA continuation coverage that is made to a former employee due to termination of employment is reported as ‘No Offer of Coverage’. However, an ALE member making an offer of COBRA continuation coverage to an ongoing employee who loses eligibility for non-COBRA coverage due to a reduction in hours (for instance, a change from full-time to part-time status resulting in loss of eligibility under the plan) should report the offer of COBRA coverage as an offer of coverage.

Information that Must Be Reported

Generally, the report will list the type and cost of coverage offered and who did and did not receive the offer of coverage.
The reference material includes a complete list of all information that must be included on the report. Note that only ALEs with self-insured plans need to compete Part III of Form 1095-C.

Filing the Report with the IRS

ALEs will furnish information to the IRS using Form 1095-C and the IRS transmittal Form 1094-C.
Certain reporting rules apply to employers in MEWAs, controlled groups, employers with collectively bargained plans and governmental employers.
Employers who certify that they made a qualifying offer to one or more employees during the year may utilize alternative reporting methods that provide less detailed information to the IRS.
These forms must be filed regardless of whether the ALE member offers coverage, or the employee enrolls in any coverage offered.

Filing Deadline

Forms 1094-C and 1095-C must be filed with the IRS on or before February 28 of the year following the year the coverage is provided (March 31, if filed electronically). (Example: deadline for paper filing is February 28, 2017 for reporting information on the 2016 calendar year.)
- An automatic 30-day extension of time to file is available if requested on or before the 1094/1095 due date. Filers may request an extension of time to file Forms 1094 & 1095 using Form 8809. Filers may request one additional extension, not to exceed 30 days, by submitting a second Form 8809 before the end of the first extension period. Note that this extension applies only to filing the 1094/1095 with the IRS. It does NOT extend the deadline for providing employee statements.
Note: Employers filing 250 or more 1095 forms must file electronically.

Distributing Statements to Individuals

Form 1095-C (or a similar statement) must be provided to each full-time employee identified on the return.
If mailed, the statement must be sent to the employee’s last known permanent address or, if no permanent address is known, to the employee’s temporary address. A reporting entity may furnish the statement electronically if specific requirements are satisfied.
Employers who certify that they made a qualifying offer to one or more employees during the year may utilize alternative reporting methods that provide less detailed information to full-time employees and responsible individuals.

Distribution Deadline

March 2Or the next business day, if the 30th day falls on a Saturday, Sunday, or legal holiday of the year following the year the coverage is provided.
- The regulations provide for an extension of time to furnish statements (up to 30 days) for a showing of good cause upon written application to the IRS. Note: unlike the extension request for filing Forms 1094/1095 with the IRS, requesting an extension of time to provide employee statements is not automatic.

WHAT IS THE RISK

The penalties for failure to file correct information returns and failure to provide correct payee statements range in the hundreds of dollars. Click here for the exact penalty amounts for these failures.
There is no maximum limitation if there is intentional disregard of the requirements to file the returns and furnish recipient statements.

Important Information:

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