The Affordable Care Act (ACA; also known as Obamacare) requires all Applicable Large Employers (ALEs) to offer their employees health insurance. In general, employers qualify as ALEs if they have at least 50 full-time employees, including full-time equivalent (FTE) employees—a combination of part-time employees that count as one or more full-time employees.
Each year, employers must send a statement—Form 1095-C—to all employees eligible for coverage. Form 1095-C involves numerous special codes, some of which can be confusing to the unprepared. We have developed a summary of the most important ones, which you can download here.
Depending on their (and your) situations, personnel may also have received other forms. To explore IRS information about Form 1095-A, sent by the Health Insurance Marketplace, click here. IRS information on Form 1095-B, provided by insurers, is available here.
Smaller Employers May Have Requirements, Too
Any employer that sponsors self-insured group health coverage—whether or not the employer is an ALE—has information reporting responsibilities as a provider of minimum essential coverage. In general, companies that sponsor self-insured health coverage will use the same form (Form 1095-C) to satisfy this requirement by filling out an additional section (Part III) for employees and family members who enroll in self-insured coverage. (ALEs leave Part III blank; you may field questions about this issue, as well.)
What Qualifies as Self-Insured Group Health Coverage?
Any self-funded plan where the employer assumes the financial risk for providing health care benefits to its employees qualifies as a self-insured group health plan. With these plans, self-insured employers pay for each out-of-pocket claim as it is incurred, rather than paying a premium to an insurance carrier.
Self-insured plans are very complex and they can expose the company to significant risk. Yet, according to a report by the Employee Benefit Research Institute (EBRI), approximately one third of insured workers and their dependents receive benefits through employer-sponsored self-insured group health plans.