That time of the year is quickly approaching — Affordable Care Act (ACA) reporting forms will be due soon.
The IRS released the 2016 draft Forms 1094-C and 1095-C, which gives you ample time to familiarize yourself with the ACA reporting forms and collect all of your company data before submitting them.
The 2016 draft Forms 1094-C and 1095-C and their corresponding instructions are similar to the final 2015 versions, but have some proposed additions and revisions that should be reviewed if you are a plan sponsor and third-party administrator.
These are the proposed revisions to the Forms 1094-C and 1095-C
- On Form 1094-C, line 22, box B is designated “Reserved.” The Qualifying Offer Method Transition Relief is not applicable for 2016.
- In Part III on Form 1094-C, column (b), “Section 4980H” was inserted before “Full-Time Employee Count for ALE Member” to remind filers that the section 4980H definition of “full-time employee” applies for purposes of this column, not any other definition that an ALE Member may use for other purposes.
- On Form 1095-C, the language “Do not attach to your tax return. Keep for your records.” was inserted under the title of the form to inform the recipient that Form 1095-C should not be submitted with the return.
- Other minor clarifying changes were made to both forms.
The IRS also proposed changes to the Form 1095-C Series 1 and 2 indicator codes
- Code 1I for Form 1095-C, line 14, and code 2I for Form 1095-C, line 16, are no longer applicable and have been reserved.
- New codes 1J and 1K have been added for Form 1095-C, line 14.
These codes, 1J and 1K, address conditional offers of spousal coverage (also referred to as coverage offered conditionally). A conditional offer is an offer of coverage that is subject to one or more reasonable, objective conditions (for example, an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer). Using new codes 1J and 1K, an ALE Member may report a conditional offer to a spouse as an offer of coverage, regardless of whether the spouse meets the reasonable, objective condition.
Proposed changes to transition relief
Several forms of transition relief were available to employers for 2015 under sections 4980H and 6056, but only limited transition relief continues to apply in 2016. References to transition relief that applied only in calendar year 2015 have been removed.
Other important proposed revisions and changes:
- Clarification of coding for COBRA continuation coverage on line 14 of Form 1095-C. The instructions state that code 1H must be entered on line 14 for any month for which the offer of COBRA continuation coverage applies, and code 2A (Employee not employed during the month) must be entered on line 16.
- The ‘Plan Start Month’ continues to be optional for the 2016 Form 1095-C and the ALE Member may leave it blank.
- The multiemployer plan interim guidance continues to apply for 2016
- The reference to the 2015 penalty relief was removed and a description of adjusted information reporting penalty amounts is included.
For more information on ACA reporting for ALEs, please review the links below and be sure to watch your email for invitations to our upcoming Eastern Benefits Group webinars and workshops covering Employer ACA reporting. If you have immediate questions, contact a representative of Eastern Benefits Group on our website or by phone at 1-800-333-7234.