1094-C and 1095-C and Instructions

Final 2015 Form 1095-C, Instructions, Electronic Filing Steps

Beginning with calendar year 2015, an applicable large employer (“ALE”) must use Forms 1094-C and 1095-C to report the information required under Internal Revenue Code sections 6055 and 6056 about offers of health coverage. The information reported allows the IRS to manage the requirements of both the individual and employer mandates and subsidy eligibility under the Affordable Care Act (“ACA”).

Final 2015 Forms 1094-C and 1095-C and Instructions

Notable Changes to the final instructions include:

Reporting on HRAs:
- An ALE with an insured group health plan and a self-insured HRA is not required to report the HRA coverage on Form 1095-C as long as the individual with the HRA coverage is also covered on the group health plan
- Self-insured health plans with an HRA are also not required to report on Form 1095-C
- If an individual is covered on the HRA, but not on the group health plan, then reporting on the HRA is required in Part III of the form 1095-C
- Reporting is required for any retiree-only HRA’s
Reporting COBRA offers:
- Requires insured plans to now report offers of COBRA to former FTEs that actually enroll in the COBRA coverage and to employees offered COBRA based on a reduction in hours.
- Clarifications on how to report for COBRA participants. When an offer of COBRA coverage is made to an employee due to a reduction in hours, the employer should indicate on Form 1095-C that an offer of coverage was made, whether or not the employee elects to enroll in the coverage. In this situation, the cost used to determine affordability should be the employee’s self-only COBRA premium or contribution.
Monthly Employee Contribution (Form 1095-C Line 15):
- To calculate monthly employee contribution for the year, an employer may divide the total employee share of the premium for the plan year by 12 (number of months in the plan year)
Plan Year Information on Form 1095-C:
- Part II includes a space for employers to indicate the plan year start date (01 through 12)
- This information is optional for calendar year 2015
- Employers that change the plan year during the calendar year will use the earliest applicable month
- Mandatory reporting of this information is expected for the 2016 calendar year
Multi-Employer interim relief rule (Form 1095-C Line 16):
- If the employer qualifies for this relief rule (Code 2E), the 2E will apply.

Forms 1095-C for the 2015 calendar year must be provided to all FTEs (if self-insured, to any covered individual) by February 1, 2016. Employers who file electronically have until March 31, 2015 to report to the IRS. Otherwise, the due date for paper delivery to the IRS is February 29, 2016.

For Final forms and Instructions visit:

Form 1094-C: http://www.irs.gov/pub/irs-pdf/f1094c.pdf
Form 1095-C: http://www.irs.gov/pub/irs-pdf/f1095c.pdf
Instructions: http://www.irs.gov/pub/irs-pdf/i109495c.pdf

Penalties for Failure to Report

Penalties for filing failures have been increased via the Trade Preferences Extension Act of 2015 effective with this first year as follows:

Penalty	Previous Amount	Revised Amount
Failure to file/furnish an annual IRS return or provide individual statements to all full-time employees	$100	$250
Annual cap on penalties	$1,500,000	$3,000,000
Failure to file/furnish when corrected within 30 days of the required filing date	$30	$50
Annual cap on penalties when corrected within 30 days of required filing date	$250,000	$500,000
Failure to file/furnish when corrected by August 1 of the year in which the required filing date occurs	$60	$100
Cap on penalties when corrected by August 1 of the year in which the required filing date occurs	$500,000	$1,500,000
Lesser cap for entities with gross receipts of not more than $5,000,000	$500,000	$1,000,000
Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected within 30 days of required filing date	$75,000	$175,000
Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected by August 1 of the year in which the required filing date occurs	$200,000	$500,000
Penalty per filing in case of intentional disregard. No cap applies in this case.	$250	$500

For additional information, see http://www.irs.gov/Affordable-Care-Act/Employers/Information-Reporting-by-Providers-of-Minimum-Essential-Coverage

Electronic Filing Steps

Filers of 250 or more information returns must file the returns electronically, subject to waiver via Form 8508. Filers of less than 250 information returns may file the returns electronically.

Employers (and vendors on behalf of employers) are required to use the ACA Information Return (“AIR”) system and complete the following steps prior to being able to electronically submit any forms:

Register with the IRS’s e-services website, including submission of personal information about the person registering for the Submitting Entity;
Obtain an AIR Transmitter Control Code (“TCC”), an unique identifier authorizing each Submitting Entity to submit the Reporting Forms; and
Pass a series of technical/system tests to ensure that Reporting Forms will be properly submitted when due.

The first two steps are available now. The third step is expected to become available in the fall.

For more information on the AIR program, visit https://www.irs.gov/for-Tax-Pros/Software-Developers/Information-Returns/

At Roche Financial, we are committed to guiding you through these requirements as well as offering automated solutions to help transmit these forms in a timely process.

Call today for more information!

Disclaimer: This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws or regulations, or to address specific client situations. You should not act or rely on any information contained herein without seeking the advice of an attorney or tax professional. Securities offered through Cetera Advisors LLC, Member FINRA/SIPC Roche Financial and Cetera Advisors LLC are not affiliated entities.