With the many challenges the country – and likely your business – has been facing over the past several months, … Read more
To satisfy the reporting requirements effective this 2016 tax-filing season, fully insured and self-insured applicable large employers must complete Form 1095-C (and the 1094-C transmittal form).
Similar to W-2s and 1099s, this involves distributing employee statements by one date, followed by filing with the IRS (either by paper or electronically) by a second date. (See filing deadlines here.) Here’s some insight on how to manage the process.
Before you can sit down with the actual forms and start the filing process, you must gather certain employee data. And because nothing is simple, you’ll need to tap a few different departments or sources to do this, including HR, benefits, payroll and your time-tracking system.
The information you’ll need to complete the forms includes:
This information correlates with the parts of the 1095-C as follows:
Part 1 is where you enter identifying information for the employee, such as name, address and Social Security number – and identifying information for you, the employer, such as name, address and Employer Identification Number.
Part 2 is all about the offer of coverage. In the three lines here, you’ll enter information about the health coverage offered by month (if any), the cost of the cheapest monthly premium the employee could have paid for self-only coverage and the months you met an affordability safe harbor.
If you’re self-insured, Part 3 is about the health insurance that was supplied to all covered individuals – including spouses, dependents, retirees and COBRA enrollees. You’ll need Social Security numbers or, if these numbers aren’t available, date of birth. This information isn’t completed by insured employers because it’s captured separately, by the health insurance providers themselves, through the 1095-B.
The bulk of the work in completing the 1095-C will be with Lines 14-16 in Part 2. Although the subject is too complex to cover fully in this article, keep in mind:
On Line 15, you’re reporting the employee share of the lowest-cost monthly premium for self-only coverage. This helps the IRS determine if affordable coverage was made available to the employee. You’ll only fill out this section if you entered code 1B, 1C, 1D or 1E on Line 14. Include cents with this figure and don’t round numbers.
Also, if you entered 1A on Line 14, nothing needs to be entered here – or on Line 16. Code 1A indicates you made a qualified offer and, in turn, don’t need a safe harbor or other relief.
Line 16 — which involves nine codes again – are safe harbor codes that indicate whether an individual was employed during the month, whether the employee was eligible and/or enrolled in coverage, and if any affordability safe harbors or other relief apply.
In a nutshell, you’re giving the IRS a reason why you shouldn’t be penalized under the Employer Shared Responsibility provision. Again, you only fill this out if a code applies to the employee for any particular month.
For the actual reporting process, the IRS estimates that it will take 12 minutes per form. This is a new process for everyone involved, though, so you should anticipate a bigger investment of time and resources – at least this first year.
With the many challenges the country – and likely your business – has been facing over the past several months, … Read more
Tax season is coming up fast, and soon you’ll be filing mandatory employee and contractor forms. Now is the time … Read more
In today’s increasingly complex payroll tax and employment law environment, multistate employers must clear many hurdles to remain compliant. When … Read more
On July 1, 2019, President Trump signed the Taxpayer First Act. This act proposes wide-sweeping changes in an effort to … Read more
If you’re confused about the status of the Affordable Care Act (ACA), you’re not alone. While the ACA continues to … Read more
As the year closes and the tax-filing season looms, employers may question the status of Affordable Care Act (ACA) reporting. Is … Read more
Upon signing the tax overhaul bill in late December, President Trump declared that the ACA was “essentially” repealed, thanks to … Read more
Businesses preparing for this year’s Affordable Care Act (ACA) reporting requirements just received an end-of-the-year gift from the IRS. On … Read more
At ComplyRight, our mission is to free employers from the burden of tracking and complying with the complex web of federal, state and local employment laws, so they can stay focused on managing and growing their businesses.
©2020 ComplyRight, Inc.