First, a refresher…
What are 1095 Forms?
Under the Affordable Care Act, Americans must have health insurance or pay a tax penalty. The 1095 form proves to the IRS that you indeed had coverage. It’s important to realize however that employees don’t need a 1095-B or 1095-C to file their tax return.
All 1095 forms contain similar policyholder information but they come in three distinct flavors:
- 1095-A: The Federal Government sends this form to individual policyholders who purchased their coverage through the Marketplace.
- 1095-B: Health insurance companies mail 1095-B’s to members that had coverage through small employers. Self insured employers must also send this form to their employees.
- 1095-C: Larger employers, with over 50 employees, must provide a 1095-C to their employees.
- The 1094-B and 1094-C forms are used in transmitting the 1095 forms to the Government. They’re basically glorified fax cover sheets.
What’s the point?
The Government uses 1095 information in three main ways. First, the IRS looks for inaccurate subsidies. Next, they confirm large employers offered minimum essential coverage, as mandated by the shared responsibility provision. Finally, individual policyholder’s proof of coverage is verified.
Do all employers need to file 1095 forms?
Thank goodness the answer is no! Only employers that meet one or more of the following criteria need to complete 1095 forms:
- Employers with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year.
- Employers that had self-insured medical plans in the prior year.
- The popular Capital BlueCross ASO and Aetna Funding Advantage are typically considered self-insured plans.
Is there a penalty if You don’t file?
Unfortunately there is. The penalty is approximately $260 per employee, ouch!
When are they due?
Finally, some good news. The IRS recently extended the deadline to distribute the forms to employees from 01/31/2017 to 03/02/2017. The deadline to file with the IRS remains 2/28/17. On another positive note, the Government will continue good-faith relief from penalties this year. So as long as employers show a good faith effort, the IRS will not penalize them for errors on their 1095 forms.
At your service…
The Employer Helper Tool
We have worked with our partners, at the Hartman Group, to make your 1095 experience a little less painful this year. The result is our new 1095 Employer Helper spreadsheets. The downloadable workbooks give employers an easier platform to work in when entering 1095 data. They allow the copying and pasting of input for similar employees and automated mail merge exports to 1095 forms. Take a look below and choose the spreadsheet tool that is right for your company. We’ve also included a few output examples.
- Fully-Insured 2016 Workbook – For fully-insured employers
- Self-Insured 2016 Workbook – For self-insured employers
- Robert Enrolled, Cheryl Waived & Tom Complicated – Samples of the output from these workbooks (from case study presentation on YouTube )
Employers only need to complete the red and blue tabs. The other tabs contain helpful reference materials and instructions. While this process doesn’t automatically select them, the Series code values and descriptions are available under the code tabs. Please understand that this free tool, while intended to be helpful, does not a guarantee accurate filings and may not be the right tool for all employers. If you have questions please feel free to contact us.
1095 Compliance Newsletter
Do you want even more helpful information on all things 1095? Simply complete the required fields below and click submit for instant access to our Comprehensive 1095 Compliance Bulletin for 2016.