Employer Reporting of Health Coverage: Forms 1094 and 1095
Under the Affordable Care Act, Applicable Large Employers (ALE’s) must provide affordable minimum essential coverage if they have 50 or more full time employees (or full time equivalent employees). If an employer fails to do so, they must pay a penalty. The ALE’s must also report that coverage to the IRS and their employees every year, using the forms 1094 and 1095.
What are the 1094 and 1095 forms?
The 1094 form acts as a cover sheet to 1095 form and will only need to be sent to the IRS. The 1095 form will be sent to both the employee and the IRS. These forms offer detailed information about the health insurance you offer and what has been elected by each employee.
What are the forms for?
This mandated reporting helps the IRS monitor employee coverage and cost of coverage to ensure enforcement of the Employer Shared Responsibility Provision (ESRP). The forms help determine if an ALE is be subject to the Employer Shared Responsibility Provision penalties and also determine if employees are eligible for a premium tax credit.
What form to file…
There are several types of the 1095 form – A, B, and C. The type of insurance you offer determines the type of form that will be required.
- 1095-A is for individuals who have received insurance from the marketplace instead of their employer, and is therefore not a requirement of employers to file.
- 1095-B is for ALE’s who offer self-funded insurance. The issuer or carrier delivers this form to covered individuals only, including non-employees.
- 1095-C is filed by ALE’s who offer either fully insured or self-funded coverage, but they must provide the form to all full time employees, whether they have enrolled or not.
Small employers who aren’t subject to the Employer Shared Responsibility Provision will use form 1094-B and 1095-B to report information about covered individuals.
When to File
The forms must be filed and mailed before February 28th. Electronic filing can be done by March 31. A 30 day extension can be requested by completing a good faith transition relief form and submitting before the 1094 and 1095 forms are due. It is very important to keep copies of the forms for your records, in the case that you may need to reproduce them.
There are penalties for failure to file and report coverage statements. Our agents can help you to avoid these penalties or see if certain criteria are met for penalties to be waived. Contact Healthcare Consultants Inc if you need assistance.