IRS Releases Final 2015 1094/1095 Forms and Instructions | Fort Worth Benefits Broker

denise299
Oct 4, 2015
3 min read

On September 17, 2015, the IRS released final versions of the 2015 reporting forms (and instructions) required under § 6055 and 6056 of the Internal Revenue Code, as part of the Affordable Care Act.

Forms 1094/95-C are required under § 6056 and should be used by applicable large employers (ALEs), including ALEs who are self-funded (self-insured). Forms 1094/95-B, required under § 6055, should be used by insurance carriers and small employers offering self-funded minimum essential coverage.

The difference between these final versions of the forms and the draft versions released earlier this year are primarily minor, and we have outlined key highlights for employers below. Additionally, there are a number of resources, including ThinkHR’s healthcare reform knowledge base, available to help employers understand which forms, if any, must be completed and how those forms should be completed.

Updates are as follows:

No changes to Form 1094-C.
Changes to Form 1095-C are located in the instructions for the recipients and include items such as:
The Line 10 telephone contact number may also be used to report errors noted on the form and to ask that they be corrected.
Notification that Line 14 may not include offers of coverage through a multi-employer plan.
The Code 1A explanation initially included a dollar amount of $1,108.65 to represent the single federal poverty line, but now simply states that coverage would be equal to or less than 9.5 percent of the single federal poverty line.
Changes to Instructions for Forms 1094/95-C:
COBRA offers to terminated employees. Previously, Q&A guidance from the IRS indicated that offers of COBRA coverage made to former employees should be reported as an “offer” on Form 1095-C, Line 14 in circumstances where the former employee actually elected coverage. The final instructions clarify that offers of COBRA coverage for terminated employees should not be reported as offers of coverage under any circumstances, including when a former employee elects COBRA coverage. Instead, the employer should enter code 1H on Line 14 indicating there was no offer of coverage. An employer could also use code 2A on Line 16 for a former employee. This code indicates that the individual was not an employee for the month and can help the employer avoid a potential penalty.
Monthly total employee counts. Previously, instructions indicated that ALEs counting the total number of employees each month for Part III, column (c) of Form 1094-C could use one of four date options to collect the count. They could either use the first day of each month, the last day of each month, the first day of the first payroll period of each month, or the last day of the first payroll period of each month. The new instructions add an additional option to use the 12th day of each month.
Defining an ALE. The new instructions reflect recent legislative changes and indicate that, when determining ALE status, an employer may disregard an employee for any month in which the employee received medical coverage through TRICARE or the Veterans Administration.
Reporting health reimbursement arrangement (HRA) coverage. See this discussion under the Instructions for Form 1095-B below. The updated instructions for Forms 1094/95-C follow those same revised rules.
Qualifying offer of coverage. The instructions now include a clarifying example which indicates that an employer may not provide a qualifying employee with an “alternative statement” (that is, a statement in lieu of Form 1095-C) unless an employee received a qualifying offer for all 12 months of the calendar year. This is an important distinction because an employer might be able to use code 1A (indicating a qualifying offer) for a particular employee for one or more months of the year, but might not be able to send that employee an alternative statement if code 1A doesn’t apply for all 12 months.
No changes to Form 1094-B.
Form 1095-B now provides insurers an option to truncate the employer identification number (EIN) and only include the last four digits.
Changes to Instructions for Forms 1094/95-B regarding HRA reporting: The draft instructions created some confusion for employers with insured health plans who also sponsored an integrated HRA. Those instructions appeared to suggest that these employers would need to report separately for the HRA, even though the insurance carrier would be reporting for the insured major medical plan. The final instructions clarify that an employer sponsoring an insured medical plan and an integrated HRA for that plan is not required to report the HRA coverage separately for employees covered by both arrangements. The IRS released Notice 2015-68 on September 17, 2015 and announced its intention to propose regulations on this topic which would prevent duplication and would apply on a month by month basis.

Please note that this information is not tax or legal advice and employers are encouraged to read the instructions and forms in their entirety and work with trusted advisors to prepare these important IRS documents.