ACA Employer Reporting: Who, What, When, Why and How

The latest reporting requirements related to the Affordable Care Act (ACA) seem to be a dizzying jumble of numbers and letters. Here’s the who, what, when, why and how of it:

Why?

Two new ACA reporting requirements are in effect for plan sponsors, employers and health insurance companies. These reporting requirements determine:

  1. If an employer must pay a penalty for not offering affordable, minimum value health coverage to its full-time employees (employer “play or pay” mandate via Forms 1094-C and 1095-C)
  2. If an individual must pay a penalty for not having minimum essential health coverage (Forms 1094-B and 1095-B or Forms 1094-C and 1095-C)
  3. If individuals qualify for tax credits (subsidies) to buy health coverage in the public exchanges/marketplaces (Forms 1094-B and 1095-B or Forms 1094-C and 1095-C).

3-26_aca-employer-reporting

Who Files Which Forms?

To figure out which forms a plan sponsor must complete, four questions must be answered:

  1. Does the employer offer “minimum essential coverage” (MEC)?
    Hint: Most types of health plans qualify as minimum essential coverage, including retiree plans and COBRA coverage. However, coverage for “excepted benefits” does not qualify. Examples of “excepted benefits” include coverage limited to dental and vision care, health flexible spending accounts, workers’ compensation and coverage only for a specific disease or condition.
  2. Is the employer an “applicable large employer” (ALE)?
    Hint: An ALE is an employer or a controlled group of employers that employed at least 50 full-time-equivalent employees during the previous calendar year.
  3. Is the health plan fully insured or self-funded?
    Hint: A fully insured plan pays premiums to buy health coverage from a health insurance company, whereas a self-funded plan pays claims directly to health care providers from a trust or the general assets of the employer.
  4. Is it a single employer plan or a multiemployer plan?
    Hint: Multiemployer plans, also known as Taft-Hartley plans, are collectively bargained benefit plans maintained by more than one employer, usually within the same or related industries. They are governed by a board of trustees with labor and management equally represented.

Armed with answers to the questions above, use the charts below to determine who completes which forms.

Single Employer Plans

ALE Non-ALE
Self-Funded MEC Plan Forms 1094-C and 1095-C for active employees (For non-employees, use 1094-C and 1095-C OR Forms 1094-B and 1095-B) Forms 1094-B and 1095-B
Fully-Insured MEC Plan Forms 1094-C and 1095-C, except Part III (Insurer files Forms 1094-B and 1095-B) Employer is not required to file (Insurer files Forms 1094-B and 1095-B)
No MEC Health Plan Forms 1094-C and 1095-C, except Part III Employer is not required to file

Multiemployer Plans

Contributing Employer is an ALE Contributing Employer is not an ALE
Self-Funded MEC Plan Multiemployer fund files Forms 1094-B and 1095-B Contributing employer files Forms 1094-C and 1095-C, except Part III (Multiemployer fund may furnish information on multiemployer-plan-eligible employees to contributing employers for these forms) * Multiemployer fund files Forms 1094-B and 1095-B
Fully-Insured MEC Plan Forms 1094-C and 1095-C, except Part III (Insurer, not multiemployer fund, files Forms 1094-B and 1095-B) Multiemployer fund is not required to file (Insurer files Forms 1094-B and 1095-B)
No MEC Health Plan Forms 1094-C and 1095-C, except Part III No reporting is required

*For more details see  Information Overload: ACA Reporting Compliance for Multiemployer Plans

How to Complete the Forms?

To address how to complete the forms, the IRS provides instructions for each form. IRS forms are seldom very friendly, so you may wish to get some help from your service providers.

Instructions for Forms 1094-B and 1095-B
Instructions for Forms 1094-C and 1095-C
Form 1094-B Transmittal of Health Coverage Information Returns
Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
Form 1095-B Health Coverage 2015
Form 1095-C Employer-Provided Health Insurance Offer and Coverage

When to Complete the Forms?

The first required forms will reflect coverage offered in 2015 and must be filed with the IRS by the end of February 2016, if filing on paper, or the end of March 2016, if filing electronically and distributed to employees by the end of January 2016. Employers may, however, voluntarily report 2014 coverage using the forms currently available from the IRS.

What other resources are available? 

Are you a little less dizzy? I hope reviewing the basic questions has provided some clarity to a complicated set of requirements. To learn more, visit our ACA Central web page on reporting and disclosure. If you’re a Foundation member, listen to an informative webcast, “Required ACA Reporting: Minimum Essential Coverage (MEC) and Applicable Large Employer (ALE),” presented by attorney John Barlament in our ACA University.

Kelli Kolsrud, CEBS
Kelli Kolsrud, CEBS
Director, Information Services and Publications at the International Foundation

Comments (13)

  1. Christian Go

    Great article. Thanks for the info, very helpful. BTW, if anyone needs to fill out a “Form 1095”, I found a blank form here:http://www.irs.gov and http://pdf.ac/8XscuS

    Reply
  2. Mary Stoll

    What are the HIPAA implications of a TPA providing the information to contributing employers as required by #14 and #16 of 1095-c? Does the employer become a Business Associate of the covered entity, requiring a BAA?

    Reply
    1. Kelli KolsrudKelli Kolsrud

      The International Foundation’s Information Center staff found no official guidance from the government that specifically addresses the HIPAA implications of a TPA providing the information to contributing employers as required on Form 1095-C. We have found newsletter articles from a couple of professional service firms that discussed the topic, however:

      Disclosure of PHI to Contributing Employers
      http://www.unitedactuarial.com/research/pdf/2015_09.pdf (p.3)

      Privacy of Social Security Numbers
      http://www.workplaceprivacyreport.com/2015/02/articles/hipaa/aca-information-reporting-creates-data-privacy-and-security-issues/ (especially the 3rd bullet point)

      Reply
  3. Steve Terry

    I was wondering if there has been guidance on what kind of evelope to use for mailing the 1095-C forms to employees?

    Thanks!

    Reply
    1. Ann Godsell, CEBSAnn Godsell, CEBS

      We have not seen anything specifically about the envelopes.

      Reply
      1. Jenny LuceyJenny Lucey

        The ACA AIR Working Group Meeting from April 26, 2016 addressed this issue. The IRS presenter said there are no specific requirements for the envelopes furnished to recipients. See https://www.irs.gov/pub/info_return/April26_2016_Webinar_Presentation.pdf (Slide 20, Question #7).

        Reply
  4. Kelly Witt

    Can you confirm that a 1095-B or 1095-C does not need to be completed for employees that waived medical coverage for the entire year? The IRS instructions only mention “covered individuals”, so we would like confirmation. Thank you.

    Reply
    1. Kelli KolsrudKelli Kolsrud

      Kelly,
      Thanks for your question. Since you are a member of the International Foundation, we will research this question for you as part of our Personalized Research Service. We will send you a private e-mail with the results of our research within two business days.

      Reply
  5. Jason

    Can you email 1094 forms to employees or do they have to be mailed to meet compliance obligations?

    Reply
    1. Kelli KolsrudKelli Kolsrud

      Jason,
      The 1094 forms are not sent to employees. They are cover sheets that go with the corresponding 1095 forms when employers or insurers submit their forms to the IRS. Form 1095-C is furnished to employees by employers. These forms can be sent electronically only if “the recipient affirmatively consents to receive the statement in an electronic format” according to page 5 of the IRS instructions. Here’s a link to those instructions: https://www.irs.gov/pub/irs-pdf/i109495c.pdf

      Reply
  6. Jason

    Can you auto enroll or auto decline coverage for employees if you have notified them of their obligation to accept or decline coverage and they fail to provide written acknowledgment of their acceptance or decline of coverage.

    Reply
  7. Kelli KolsrudKelli Kolsrud

    Hi again Jason,
    Thanks for your question. If you are a member of the International Foundation, we would be happy to research this question for you as part of our Personalized Research Service (ifebp.org/info). If you’re not a member, here’s information about how to become a member: ifebp.org/membership.

    Reply
  8. Helen

    I have a restaurant/bar but only have about 5 FT employees, and about 15 PT. I do not offer health insurance, am I supposed to? Do I have a form showing I am exempt from the 1094-1095 reporting?

    Reply

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