1095-C Reporting

ACA Reporting

Navigating the complexities of tax filing can be challenging for many businesses, especially when it pertains to healthcare provisions under the . Central to this is Form 1095-C, a crucial reporting tool for Applicable Large Employers (ALEs) detailing health coverage offers and enrollment. With stringent requirements, specific deadlines, and potential penalties for non-compliance, understanding is pivotal for businesses aiming to fulfill their obligations seamlessly. This article delves into the intricacies of Form 1095-C Reporting, offering insights into its essential components, requirements, associated deadlines, and the ramifications of missteps in its submission.

What is Form 1095-C?

is the information‑return that Applicable Large Employers (ALEs) — generally those averaging at least 50 full‑time (or full‑time‑equivalent) employees during the prior calendar year — must furnish to each full‑time employee and file with the IRS. It details the health‑coverage offer (or lack thereof) made for every month of the year and is a cornerstone of the Employer Shared Responsibility provisions (ESRP). The IRS uses the data to determine whether an ALE is liable for potential ESRP assessments and to help employees reconcile premium‑tax‑credit eligibility.

Each employee — and, if the ALE is self‑insured, every covered individual listed in Part III — should receive a copy of the for personal tax records. The form shows the months during which coverage was offered and, where applicable, actually enrolled for the employee and any dependents. Although the form is not attached to an individual tax return, retaining it is prudent in case the IRS requests verification.

General information about Forms 1094-C and 1095-C

Forms and 1095-C are tax forms specifically tied to ACA Provisions. These forms are used specifically by ALEs to report the offers of coverage made to full-time employees. The forms show detailed information about the health insurance offers that were made to each employee.

Each Form 1095-C has specific information about the health insurance offered to an employee. These forms should be furnished to the applicable employees and filed with the IRS. However, Form 1094-C is a transmittal form, or summary form, that accompanies the filed with the IRS. It provides a summary of the filing and more information about the employer. Together, these forms are used to verify compliance with the ACA.

What information is included in Form 1095-C reporting?

lets an Applicable Large Employer (ALE) tell both the IRS and each full‑time employee exactly what health‑coverage offer (if any) was made for every calendar month, and whether anyone actually enrolled in that coverage. These data points allow the IRS to determine potential Employer Shared Responsibility payments while helping employees verify eligibility for a Premium Tax Credit under the .

Form 1095‑C — line‑by‑line overview

  • Part I — Employee & Employer Information (Lines 1‑13)
    • Identifies the employee and the ALE member: name, street address, city/state ZIP, and Tax Identification Numbers (TINs); plus a telephone number employees can call with questions.
  • Part II — Employee Offer of Coverage (Lines 14‑17)
    • Snapshot items (not monthly):
      • Employee Age on January 1 — used for age‑rated affordability tests.
      • Plan Start Month — the first month of the plan year that begins in the calendar‑year being reported.
    • Monthly fields (completed for each month and for the “All 12 Months” column):
      • Line 14 — Offer of Coverage: enter the appropriate (1A–1U) describing what, if anything, was offered to the employee, spouse, and dependents.
      • Line 15 — Employee Required Contribution: dollar amount the employee would have paid for the lowest‑cost self‑only option providing Minimum Essential Coverage (leave blank for certain codes such as 1A).
      • Line 16 — Safe Harbor / Other Relief: enter the applicable (2A–2I) to explain why a penalty should not apply (e.g., affordability safe harbor, limited non‑assessment period).
      • Line 17 — ZIP Code: populated only when Safe Harbor 2G (ZIP‑code‑based affordability) is claimed.
  • Part III — Covered Individuals (Lines 18‑30)
    • Lists every person who actually enrolled in the employer’s self‑insured plan (employee, spouse, and dependents), including TIN, DOB (if TIN unavailable), and months of coverage.
      Important: Part III is completed only when the ALE provides self‑insured or level‑funded coverage. For fully insured plans, the carrier files separate Forms 1095‑B.

Collectively, these line items indicate whether the offer met Minimum Essential Coverage (MEC), Minimum Value (MV), and ACA affordability standards. Employees can therefore confirm they were offered ACA‑compliant coverage, and the IRS can assess whether the ALE satisfied its Employer Shared Responsibility mandate under Internal Revenue Code §4980H.

The information provided in the outlines the type of coverage and its affordability. By examining the form, employees can determine if they had ACA-compliant coverage, and the IRS can determine if employers met their employer shared responsibility obligations.

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Who needs to submit a Form 1095-C filing?

Submitting a filing to the IRS is a requirement for all ALEs. An ALE, or Applicable Large Employer, is an employer that had an average of at least 50 full-time and full-time equivalent employees during the previous calendar year.

ALEs are required to offer health insurance coverage to their full-time employees that meets . They must also use and 1095-C to report the offered coverage to the IRS.

What are the deadlines for Form 1095-C reporting?

There are a couple of that ALEs must adhere to for their ACA reporting. They are as follows:

  • Monday, March 3rd, 2025 - Deadline to furnish employee copies
  • Monday, March 31st, 2025 - to e-file with the IRS

Please note that anyone with more than 10 Forms 1095-C must submit an with the IRS.

It's essential for employers to be aware of these dates to ensure timely compliance and avoid .

What are the filing methods for Form 1095-C reporting?

allows for two primary filing methods: electronic and paper. ALEs that need to submit 10 or more Form 1095-C documents are required to file electronically through the IRS's Information Returns (AIR) system.

However, those submitting fewer than 10 forms have the option to file via paper, though electronic filing is still encouraged for its efficiency. When using the paper method, ALEs must also send the transmittal to accompany the set of Form 1095-C documents.

Penalties

Non-compliance with the can lead to penalties for ALEs. Penalties may be imposed for failing to provide Form 1095-C to full-time employees or for not filing the form with the IRS by the stipulated deadlines. Additionally, can also arise from submitting incorrect information or incomplete forms. The penalty amounts are as follows:

  • Failure to file (or failure to file correct forms) - $330 per form
  • Failure to distribute recipient copies - $330 per form
  • Failure to file electronically if required - $330 per form
  • Penalties may be higher if there is intentional disregard

It's crucial for employers to be aware of these potential and ensure timely and accurate compliance to avoid financial repercussions.

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Key Takeaways

In the labyrinth of regulatory compliance, emerges as a cornerstone for businesses navigating the stipulations of the (ACA). Ensuring accurate and timely reporting not only safeguards businesses from potential financial penalties but also underscores their commitment to employee well-being through healthcare provisions. By keeping abreast of the requirements, , and nuances of Form 1095-C, businesses can uphold their responsibilities with confidence, fostering a culture of transparency and adherence to regulatory standards. As the ACA continues to shape the healthcare landscape, diligent attention to remains paramount for every Applicable Large Employer (ALE).

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