The IAA One Minute Blog

The Affordable Care Act has imposed significant information reporting responsibilities on employers. The latest one, the 1094s and 1095s do not need to be filed until 2016, but businesses need to start tracking information now.

What are the 1094s and 1095s?

The new information reporting system will be similar to the W-2 in that an information return (1095-B or 1095-C) will be prepared for each applicable employee. These returns will be filed with the IRS using a single transmittal form (1094-B or 1094-C). Employers must file these returns annually by February 28 (March 31 if filed electronically). Therefore, employers will be filing these forms for the 2015 calendar year by February 28 or March 31 of 2016.

The filing requirements are based on an employer’s health plan and number of employees. Forms that will be filed are:

• 1094-B (Transmittal of Health Coverage Information Returns) and 1095-B (Health Coverage): These forms will be filed by insurance companies to report individuals covered by employer-sponsored group health plans. Small employers (those who have less than 50 full time employees) with self-insured health plans will use these forms to report the name, address and social security number (or date of birth) of employees and their family members who have coverage under their self-insured plan.
•  1094-C (Transmittal of Employer Provided Health Insurance Offer and Coverage) and 1095-C (Employer Provided Health Insurance Offer and Coverage) will be filed by applicable large employers. These forms will be required if the employer offers an insured or self-insured health plan, or does not offer any group health plan.

The 1094s and 1095s were created to track your employees’ health insurance coverage for the year. The forms are used in determining whether an employer owes a payment under the employer shared responsibility provision. They are also used in determining eligibility of employees for premium tax credit.  

The Forms Businesses Need to File

The question that most businesses have is, what forms apply to them?

• Self-funded employer groups (those who have 50 or more full time employees):

1. Employers must submit form 1094-C to the IRS
2. Employers must distribute to all full time and enrolled part time employees form 1095-C
3. Employers must distribute to each non-employee  form 1095-C (non-employees includes Cobra beneficiaries and retirees)

Self-funded employers must include dependent information on these forms.

• Fully insured groups (employers with 50 or more full time employees):

1. Employers must submit form 1094-C to the IRS
2. Insurance companies must submit form 1094-B to the IRS
3. Employers must distribute to all full time employees and enrolled part time employees  form 1095-C (excludes dependent data; employee information only)
4. Insurance companies must distribute to all full time and enrolled part time employees  form 1095-B (this includes dependent data)

The penalty for non-compliance is $100 per form.

How IAA can Help

Insurance Administrator of America realizes that completing these forms can be complicated. That is why IAA is offering to complete the 1094-C and 1095-C for businesses that are in need of some assistance. For a fee, here is what IAA can do for you:

• Data mapping: IAA will map your employer and employee data from one or multiple source systems to the appropriate 1095-C box(s) relieving you of the burden of determining the correct IRS mapping code.
• Data reconciliation and validation: IAA will reconcile and validate your data to ensure the information on the form ties to the data you supplied. Two levels of testing are performed throughout the year.
• Form printing and mailing: IAA will facilitate the printing and mailing of the 1095-C forms to your employees prior to the statutory due date.
• Corrections: When necessary, IAA will handle individual form corrections and generate new forms which will be sent directly to the employees.
• IRS filing: IAA will ensure that our experts submit your 1094-C electronically to the IRS in the correct format by the required due date.

If you are interested in IAA handling your 1094-C and 1095-C form filing please feel free to contact Rebecca Friedman at rebeccafriedman@iaatpa.com. Remember, with IAA one call does it all.

Interested in learning more about what IAA can do for you? Click here and here.