What is the Form 1095-C?

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is a statement of health coverage offered to eligible employees under the Affordable Care Act (Obamacare). In this article, we'll provide information on the exact steps for filling out Form 1095-C and other important information. Keep reading for a straight-to-the-point guide.

Here's a quick overview of the type of information included in Form 1095-C:

• Employee and employer identification
• Months during the year the employee was eligible for coverage
• Cost of the cheapest monthly premium the employee could have paid under the plan

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Who needs to file the Form 1095-C?

Form 1095-C is primarily required to be filled out by employers with 50 or more full-time employees, including full-time equivalent employees, who offer health coverage to their employees. These employers are referred to as Applicable Large Employers (ALEs) under the Affordable Care Act. However, there are certain exceptions to this rule:

• Small employers with fewer than 50 full-time employees are not required to file Form 1095-C, unless they are members of a controlled or affiliated service group that collectively has 50 or more full-time employees.
• Employers who offer coverage through a self-insured plan must also complete Form 1095-C, regardless of the number of employees.
• Government entities, churches, and other religious organizations may be exempt from filing Form 1095-C, depending on their specific circumstances.

Essential updates to the Form 1095-C

For the most recent updates to Form 1095-C, employers should take note of the following changes:

• The deadline for furnishing Form 1095-C to employees has been extended in recent years. For example, the deadline for the 2021 tax year was extended to March 2, 2022. Employers should always check the IRS website for the latest deadline information.
• There have been updates to the codes used in Part II of Form 1095-C, which are used to report the type of coverage offered to employees.
• As of the 2019 tax year, the individual mandate penalty for not having health insurance was reduced to $0 at the federal level. However, some states have implemented their own individual mandate penalties. Employers should be aware of any state-specific requirements when completing Form 1095-C.

It's important for employers to stay informed about any changes to Form 1095-C and its requirements, as these updates can impact their reporting obligations and potential penalties. Always consult the IRS website and relevant instructions for the most current information.

2024 Form 1095-C filing deadlines

Employers are required to file Form 1095-C annually, with due dates typically falling at the end of February for paper filings and the end of March for electronic filings. They must also furnish Form 1095-C to their employees, usually by the end of January. If any due date falls on a Saturday, Sunday, or legal holiday, the deadline is extended to the next business day.

Exact deadline dates for 2024

• Form 1095-C furnished to employees - due by March 1, 2024 (for the 2023 calendar year)
• Paper filing of Forms 1094-C and 1095-C with the IRS - due by February 28, 2024
• Electronic filing of Forms 1094-C and 1095-C with the IRS - due by April 1, 2024

Form 1095-C late payment penalty

Failure to file Form 1095-C on time can result in penalties from the IRS. Although the specific penalty amount and percentage for late payment of Form 1095-C are not disclosed, it’s crucial for employers to ensure they give themselves enough time to complete and file Form 1095-C by the required deadlines. For the 2023 calendar year, the deadlines are February 28, 2024, for paper filings and April 1, 2024, for electronic filings. To avoid potential penalties, employers should stay informed about filing requirements and deadlines, and consult the IRS website for the most up-to-date information.

Step-by-Step Instructions for IRS Form 1095-C

General Information

• Who Must File: Applicable Large Employers (ALEs), generally those with 50 or more full-time employees, including full-time equivalent employees in the previous year.
• Purpose: To report information about the health insurance coverage offered to employees and their dependents.
• Due Date: Employers must furnish the form to employees by January 31 and file it with the IRS by February 28 (if filing by paper) or March 31 (if filing electronically).

Part I: Employee and Employer Information

• Lines 1-6: Employee's personal information including name, social security number, and address.
• Lines 7-13: Employer’s information including name, Employer Identification Number (EIN), address, and contact number.

Part II: Employee Offer and Coverage

• Line 14: Codes that indicate the type of coverage offered to the employee, spouse, and dependents. Each code provides details about the offer of coverage.
• Line 15: The employee’s required contribution to the plan for the lowest-cost monthly premium for self-only minimum essential coverage.
• Line 16: Codes for Safe Harbor provisions and other relief under Section 4980H.
• Line 17: The ZIP code used for determining affordability of coverage.

Part III: Covered Individuals

• Columns (a) to (e): Information about each individual covered under the employer’s plan. This section includes names, social security numbers or taxpayer identification numbers, dates of birth, and coverage details for each month of the calendar year.

Instructions for Recipients

• Understanding Form 1095-C: Employees receive this form because their employer is an ALE and it provides details on the health insurance coverage offered. It can be used for determining eligibility for premium tax credits if health coverage was purchased through a Health Insurance Marketplace.
• Part II Details: It's essential for employees to understand the information in Part II, as it affects eligibility for premium tax credits.
• Part III Importance: Lists all individuals covered under the employer's plan, detailing who had coverage and for which months.

Key Points for Employees

• Copy Retention: Employees should keep this form for their records to help resolve any questions about their personal and family coverage.
• Reporting Discrepancies: If there are any discrepancies in the form, employees should contact their employer to correct the information.
• Health Coverage Proof: Provides proof of health insurance coverage to meet the individual shared responsibility requirement under the ACA.

How to file Form 1095-C

Employers can file Form 1095-C either online or by mail. To file online, employers are encouraged to use the IRS AIR (Affordable Care Act Information Returns) system, especially if filing 10 or more forms. Electronic filing is mandatory for employers filing 10 or more information returns, but a waiver can be requested using Form 8508. Online filing can be quicker and more secure. On the other hand, to file by mail, employers should send the forms to specific addresses provided in the instructions based on their principal business, office, or agency location. Forms should be sent in a flat mailing and not folded, without paperclips or staples. Mail filing might be slower and is subject to more handling processes.

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