Understanding Reporting Requirements for Employers Under the ACA

By October 8, 2020October 21st, 2020Affordable Care Act, Benefits & Insurance

As established by the ACA in 2015, certain employers are required to report to the IRS whether they offered health coverage to their employees and information about the coverage provided. Employers report this on the 1094/1095 series of forms and must also furnish the information to their employees by January 31, 2021. Under the employer shared responsibility provisions of section 4980H, the information reported is used to determine if an employer is potentially liable for a payment, if any.

Larger employers with 50 of more employees use the “C” series of forms to report information about offers of coverage to full-time employees and covered individuals. Smaller employers having fewer than 50 employees with self-funded health plans and insurers use the “B” series forms to report its covered individuals. Depending on number of employees, employers needs to complete the appropriate forms as follows:

  • Large Employer with Fully Insured Coverage – Employer sends Form 1095-C to its full-time employees and transmits information to the IRS using Form 1094-C. The insurance company sends Form 1095-B to covered individuals.
  • Large Employer with Self-Insured Coverage – Employer sends Form 1095-C to full-time employees and to covered individuals. Employer transmits information to IRS using Form 1094-C.
  • Small Employer with Fully Insured Coverage – Insurance company takes care of all reporting using Forms 1094-B and 1095-B.
  • Small Employer with Self-Funded Coverage – Employer sends Form 1095-B to covered individuals and transmits information to the IRS using Form 1094-B.

For additional information, visit: https://www.irs.gov/affordable-care-act/employers/questions-and-answers-about-information-reporting-by-employers-on-form-1094-c-and-form-1095-c