The 1095-C form is a new federal reporting requirement created as a result of passage of the Affordable Care Act (ACA). Employers who must comply with the new health law are required to provide a 1095-C form to certain employees and then file copies with the IRS.
1095-C reporting applies to which employers?
Every employer with 50 or more full-time employees, including equivalents
All self-insured employers, regardless of the number of employees.
We now are in the first production and filing season for these forms, which add up to the most intricate workforce reporting yet required by the IRS.
Instead of being quarterly or yearly summaries of payroll data, like a W-2 or a 941, a 1095-C is a year’s worth of payroll and benefits data in monthly breakdowns.
On a 1095-C form, employers not only have to calculate employees’ service hours and then report on which employees are eligible for coverage, they also have to report on the attributes of the health insurance offered:
Does it meet ACA standards for quality?
Does it meet ACA standards of affordability for each eligible employee?
More than the ACA version of a W-2
Form 1095-C is sometimes mistakenly referred to as the ACA version of the W-2.
In reality, the only similarity between a W-2 and a 1095-C is their production time. A W-2 form must be produced for all employees at all organizations. By contrast, a 1095-C must be provided only for some employees at many, but not all, organizations.
Employees receiving a 1095-C are those who meet the ACA definition of full-time (and are thereby eligible for employer-sponsored health care coverage).
Self-insured organizations must provide the 1095-C form to all covered employees.
March 31, 2016 – date by which employees required to receive these forms must have them
May 31, 2016 – date by which paper copies of 1095-C forms must be mailed to the IRS
June 30, 2016 – date by which electronic submissions of copies of 1095-C forms must be transmitted to the IRS's new, ACA-specific filing system
1095-C reporting cannot be ignored
If you are an Applicable Large Employer (ALE), meaning an employer that must comply with the Affordable Care Act, production and filing of 1095-C forms is mandatory under federal law.
Should you choose not to provide health insurance coverage and accept the ACA penalty for not doing so, you still are an ALE required to create and file Form 1095-C for employees and its transmittal, Form 1094-C, for the IRS.
And even when you are compliant with the coverage mandate of the ACA, a segment of the market we call the ACA Burdened Majority, you still must produce and file 1095-C forms in order to prove what you are doing.
Failure to produce Forms 1095-C and 1094-C will result in a penalty of $500 per required return. All organizations based in the United States who meet the requirements listed above are required to file. The only exception is for those based in U.S. territories, such as Puerto Rico and Guam. All other organizations must comply – including state, local, federal, and Indian Tribal government employers.
1095-C reporting help for every ERP and payroll system
Integrity Data can help employers comply with all ACA reporting needs. We offer free weekly webinars where you can learn more about what is required to be ACA-compliant.
To sign up for a webinar and find even more answers to "What is a 1095-C?", click here.
To learn more about Integrity Data’s ACA tracking and reporting software, which works with every payroll and ERP system, click here.
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