On September 16, 2015, the IRS finalized these ACA coverage reporting Forms and Instructions:
We report here, with minimal analysis, changes that we recognized on first comparison to the 2015 Draft Forms and Instructions.
General Instructions for Forms 1094-C and 1095-C (Applicable Large Employers)
Referencing Pub. 5165, “Guide for Electronically Filing Affordable Care Act (ACA) Information Returns for Software Developers and Transmitters,” the final Instructions for Forms 1094-C and 1095-C omit the phrase, “currently under development” that appeared in the Draft Instructions, signaling no more revisions for 2015. A similar reference suggests finalization of Pub. 5223, “General Rules and Specifications for Affordable Care Act Substitute Forms 1095-A, 1094-B, 1095-B, 1094-C, and 1095-C,” but the IRS web site still displays 5223 only as a Draft.
A request to extend the time for furnishing statements to recipients should be made by each “filer,” and the final 1095-C Instructions clarify that “filer” means, for this purpose, “the ALE Member, or the Designated Government Entity, if applicable.”
Specific Instructions for Form 1094-C
This Example is added to clarify an aspect of the Qualifying Offer Method.
Employee’s employment with Employer begins on January 1. Employee is in a health coverage waiting period (and an employer shared responsibility payment could not apply with respect to Employee, because Employee is in a Limited Non-Assessment Period) until April 1 and is a full-time employee for the remainder of the calendar year. Employer makes a Qualifying Offer to Employee for coverage beginning on April 1 and for the remainder of the calendar year. Employer is eligible to use the Qualifying Offer method because it has made a Qualifying Offer to at least one full-time employee for all months in which both (1) the employee was a full-time employee and (2) an employer shared responsibility payment could apply with respect to the employee. Employer may use the alternative method of completing Form 1095-C under the Qualifying Offer Method for this Employee. However, unless Employer is eligible for the Qualifying Offer Method Transition Relief for 2015, Employer may not use the alternative method of furnishing Form 1095-C to Employee under the Qualifying Offer Method because Employee did not receive a Qualifying Offer for all 12 months of the calendar year.
Guidance about the Form 1095-C alternative for recipients of Qualifying Offers is revised thusly:
Alternative Method of Furnishing Form 1095-C to Employees under the Qualifying Offer Method. An employer that is eligible to use the Qualifying Offer Method meets the requirement to furnish Form 1095-C to its full-time employees who received a Qualifying Offer for all 12 months of the calendar year, and who did not enroll in coverage that is self-insured coverage, if it furnishes each of those full-time employees either a copy of Form 1095-C as filed with the IRS or a statement containing the following information.
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Employer name, address, and EIN.
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Contact name and telephone number at which the employee may receive information about the offer of coverage and the information on the Form 1095-C filed with the IRS for that employee.
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Notification that, for all 12 months of the calendar year, the employee and his or her spouse and dependents, if any, received a Qualifying Offer and therefore are not eligible for a premium tax credit.
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Information directing the employee to see Pub. 974, Premium Tax Credit (PTC), for more information on eligibility for the premium tax credit.
For a full-time employee who, for all 12 months of the calendar year, received a Qualifying Offer for insured coverage (or a Qualifying Offer for self-insured coverage in which the employee did not enroll), the employer may provide the information to the employee by furnishing a copy of Form 1095-C as filed with the IRS (with or without the statement described above) or may provide only the statement described above.
For a full-time employee who received a Qualifying Offer and enrolled in self-insured coverage, the employer must furnish the information reporting enrollment in the coverage on Form 1095-C, Part III. The employer may not use the alternative method of furnishing Form 1095-C under the Qualifying Offer Method for that employee.
Qualifying Offer 2015 Transition Relief guidance in the Instructions also was revised to read:
For a full-time employee who, for all 12 months of the calendar year, received a Qualifying Offer for insured coverage (or a Qualifying Offer for self-insured coverage in which the employee didnot enroll), the employer may provide the information to the employee by furnishing a copy of Form 1095-C as filed with the IRS (with or without the notification described above) or may provide only the notification described above. For a full-time employee who received a Qualifying Offer and enrolled in self-insured coverage, the employer must furnish the information reporting enrollment in the coverage on Form 1095-C, Part III. The employer may not use the alternative method of furnishing Form 1095-C under the Qualifying Offer Method for that employee.
The Instructions add an option for the Form 1094-C, Part II, column (c), “Total Employee Count for ALE Member” – i.e., a snapshot taken on the 12th day of each month. The five permitted options now are: 1st day of the month; last day of the month; 12th day of the month; the 1st day of the first payroll period in the month; the last day of that payroll period.
Specific Instructions for Form 1095-C
Instructions regarding line 14 entries under the multiemployer arrangement interim guidance were changed to add these italicized words:
For reporting for 2015, Code 1H may be entered without regard to whether the employee was eligible to enroll or enrolled in coverage under the multiemployer plan. For reporting for 2016 and future years, ALE Members relying on the multiemployer arrangement interim guidance may be required to report offers of coverage made through a multiemployer plan in a different manner.
Changing prior guidance, the line 14 Instructions also clarify that –
An offer of COBRA continuation coverage that is made to a former employee upon termination of employment should not be reported as an offer of coverage on line 14. For a terminated employee, code 1H (No offer of coverage) should be entered for any month for which the offer of COBRA continuation coverage applies.
Similarly, the employer should enter Code 2A (not employed) rather than 2C (enrolled) on line 16, we read later. And, Code 2E, “multiemployer interim rule relief,” should be entered on line 16, if applicable, regardless of the applicability of any other Series 2 Code. On page 15, a Definitions note clarifies that “multiemployer interim rule relief” is another term for “multiemployer arrangement interim guidance.”
Part III (lines 17-22) reporting of HRA coverage is addressed in this new paragraph:
An ALE Member with a self-insured major medical plan and a health reimbursement arrangement (HRA) is required to report the coverage of an individual enrolled in both types of minimum essential coverage in Part III under only one of the arrangements. An ALE Member with an insured major medical plan and an HRA is not required to report in Part III HRA coverage of an individual if the individual is eligible for the HRA because the individual enrolled in the insured major medical plan. An ALE Member with an HRA must report coverage under the HRA in Part III for any individual who is not enrolled in a major medical plan of the ALE Member (for example if the individual is enrolled in a group health plan of another employer (such as spousal coverage)).
Column (b) may be left blank if the non-employee covered individual has neither an SSN nor a TIN.
The Definitions within the Instructions were updated to reflect recent legislation removing from the ALE calculation employees during months of their TRICARE or Veterans Administration coverage.
Instructions for Forms 1094-B and 1095-B (Insurers, Including Self-Insurers)
Insurers are reminded that, beginning with 2016 coverage reported in 2017, they must “report coverage in catastrophic health plans enrolled in through the Marketplace.” That’s optional for 2105 coverage.
Form 1095-B, Part IV, column (b), “may be left blank if the covered individual does not have a TIN.”
Here’s the main change to the “B” Instructions.
Coverage in More Than One Type of Minimum Essential Coverage
If an individual is covered by more than one type of minimum essential coverage, reporting is required of only one of the types, if one of the following rules applies.
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If an individual is covered by more than one type of minimum essential coverage provided by the same provider, the provider is required to report only one of the types of coverage.
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A provider of minimum essential coverage generally is not required to report coverage for which an individual is eligible only if the individual is covered by other minimum essential coverage for which reporting is required. (For employer-sponsored coverage, this exception applies only if both types of coverage are under group health plans of the same employer).
Under the first exception, if an individual is covered by a self-insured major medical plan and a health reimbursement arrangement (HRA) provided by the same employer, the employer is the provider of both types of coverage and therefore is required to report the coverage of the individual under only one of the arrangements.
The second exception applies in the following situations.
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An insurance company offering a Medicare or TRICARE supplement for which only individuals enrolled in Medicare or TRICARE are eligible is not required to report coverage under the Medicare or TRICARE supplement.
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A state Medicaid agency is not required to report Medicaid coverage for which only individuals enrolled in other minimum essential coverage, such as employer-sponsored coverage or a qualified health plan, are eligible.
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An employer with an insured major medical plan and HRA coverage for which an individual is eligible because the individual enrolls in the insured major medical plan is not required to report the coverage under the HRA for an individual covered by both arrangements.
CAUTION: If an individual is covered by an HRA sponsored by one employer and a non-HRA group health plan sponsored by another employer (such as spousal coverage), each employer must report the coverage the employer provides.
We encourage close study of these final Forms and Instructions by all those responsible for 2015 covereage offer reporting.
