Welcome to MSEC’s weekly ACA FAQ on reporting. For detailed information on form completion, contact your tax advisor, payroll company, or insurance carrier. The information provided herein is general in nature. These materials are not to be construed as the rendering of legal or management advice. If the reader has a specific need or problem, please consult with a member of our professional staff in either the Human Resource Services or Employment Law Services departments of MSEC. If you have a general ACA reporting question, email it to firstname.lastname@example.org. The most commonly asked questions will be answered in this forum. In addition, the Health Care Reform Learning Zone, found on the MSEC website (msec.org), is a rich source of information about the Affordable Care Act (ACA).
Q: I’d like to communicate to my employees about the ACA reporting forms they’ll be receiving. What information should I include?
Since this is the first time individuals will receive Forms 1095-C and/or 1095-B, educating employees about these forms is a great idea!
Here are things to think about including in your communications based on employer size and type of plan funding:
- The form(s) will assist the employee and the IRS in determining whether identified individuals satisfied the obligation to have qualifying health coverage under the Individual Mandate and are therefore not subject to a penalty.
- Copies of the forms will be sent to the IRS either by the employer or the insurance carrier.
- Employees working for organizations who are self-insured will receive a 1095-C from their employer by March 31, 2016.
- Employees working for a fully-insured Applicable Large Employer (ALE) will get multiple forms: a 1095-C from their employer and 1095-B from the insurance carrier by March 31, 2016.
- Employees working for a fully-insured non-ALE (under 50 full-time and full-time equivalents) will receive only a form 1095-B from the insurance carrier by March 31, 2016.
- Employees may receive more than one 1095-B or 1095-C for 2015, for example, if they worked for multiple employers or for several affiliated companies during 2015.
- Form 1095-B or 1095-C does not need to be attached to individual tax returns. Employees can file their personal taxes prior to receiving their form(s) by checking a box on their return declaring whether they had health coverage throughout 2015.
- Employees can rely on other documentation to verify that they had coverage:
- Insurance cards
- Explanation of benefits
- Insurer statements
- W-2 or payroll statements reflecting health insurance deductions
- Records of advance payments of the premium tax credit
- Other statements showing the employee or family member had health care coverage
- There are two situations where an individual needs the actual Form 1095-B or 1095-C to file a tax return:
- when a gap in coverage of three months or more occurred during 2015 and the individual wants to apply for an exemption from the individual mandate penalty, and
- if a premium tax credit was given for health coverage through a Marketplace provider.
- Whether your plan meets ACA requirements (i.e., qualifies as Minimum Essential Coverage; meets minimum value), and whether it is affordable.
As with other personal tax filing documents, employees should keep the ACA forms with their tax records.