Do I File a 1095-C? A Guide for Applicable Employers
The Form 1095-C, also known as the Employer-Provided Health Insurance Offer and Coverage (EPOC) Information Return, is a crucial document for employers to file with the Internal Revenue Service (IRS). As an employer, it’s essential to determine if you need to file this form to maintain compliance with the Affordable Care Act (ACA). In this article, we will explore the eligibility criteria, reporting requirements, and benefits of filing Form 1095-C.
Who Needs to File Form 1095-C?
To determine if you need to file Form 1095-C, you must first meet the following criteria:
• Size: You must have 50 or more full-time employees (or a combination of part-time employees equivalent to full-time employees) on January 1st of the reporting year.
• Offer Health Coverage: You must have offered health coverage to your full-time employees (and their dependents) under a qualified health plan (QHP) for at least one month during the calendar year.
• MST (Market Subsidy Transition) Percentage: If you have a high level of Benchmark them, you must file Form 1095-C, even if you do not offer health insurance to all full-time employees.
Exceptions for Filing Form 1095-C
If you do not meet the above criteria, you are exempt from filing Form 1095-C. However, you must still provide the necessary information to your full-time employees and report it to the IRS as part of your annual information return. The exceptions include:
• Fewer than 50 full-time employees: If you have fewer than 50 full-time employees, you are not required to file Form 1095-C.
• Any employer with a qualified small employer health reimbursement arrangement (ESAs): If you have a QSEHRA, you are exempt from filing Form 1095-C.
• Employers with Exemption Certificates: If you have an exemption certificate, you do not need to file Form 1095-C.
Reporting Requirements for Form 1095-C
To file Form 1095-C, you must report the following information:
• Part I: Employer-Provided Health Coverage: Report the employer-provided health coverage offered to full-time employees.
• Part II: Offer of Coverage: Report whether health coverage was offered to full-time employees, including the following:
‣ Employee-related information: Name, address, and employer identification number (EIN) of the employee.
‣ Offer of coverage: Whether an offer of coverage was made to the employee, including the start and end dates of the coverage period.
‣ Textures of an offer: Whether the offer of coverage was an "offer of an arrangement" or a "coverage that meets minimum essential coverage"
Benefits of Filing Form 1095-C
Filing Form 1095-C offers several benefits, including:
• Compliance with the Affordable Care Act (ACA): Filing Form 1095-C helps ensure compliance with the ACA’s employer shared responsibility provisions (ESR) and the market reform provisions.
• Transparency and record-keeping: Filing Form 1095-C maintains transparency and provides a record of employee health coverage, which can be useful for future audits or disputes.
• Employee notification and tax benefits: Providing Form 1095-C to employees helps them determine their eligibility for the premium tax credit, which is calculated based on the quality and affordability of employer-offered coverage.
Tips for Filing Form 1095-C
To simplify the process, follow these tips:
• Use the IRS’s online MSPB: Utilize the IRS’s online system, the Modernized e-File (MeF) system, to file Form 1095-C.
• Keep accurate records: Maintain accurate records of employee health coverage and offer of coverage to ensure compliance and to provide to employees.
• Consult the IRS guidance: Consult the IRS guidance on Form 1095-C to ensure you are following the correct procedures for filing and reporting.
Conclusion
In conclusion, filing Form 1095-C is a critical part of the ACA’s employer reporting requirements. As an applicable large employer, it is essential to determine if you need to file this form to maintain compliance with the ACA. By understanding the eligibility criteria, reporting requirements, and benefits of filing Form 1095-C, you can ensure accurate and timely reporting and maintain the required records. If you are unsure about your obligations, consult the IRS guidance and seek professional advice from a tax expert.