Do I Need to Do Anything with Form 1095-C?
As a large employer, you are required to submit a detailed report to the IRS each year, highlighting the health insurance coverage you offered to your employees. The report is known as Form 1095-C, and it’s a crucial document for employers who are required to provide health insurance coverage under the Affordable Care Act (ACA). In this article, we’ll answer the most pressing question: Do I need to do anything with Form 1095-C?
What is Form 1095-C?
Form 1095-C is an annual information return that employers must file with the IRS to report the health insurance coverage provided to employees. The form is used to transmit the health coverage and offer information that is used to calculate the premium tax credit for eligible employees. The form is typically filed by the end of January each year, and it’s a requirement for employers with at least 50 full-time employees, including full-time equivalent workers.
Who is required to file Form 1095-C?
Here are the key requirements:
- Employers with 50 or more full-time employees: If you have at least 50 full-time employees, including full-time equivalent employees, you’re required to file Form 1095-C.
- Employers with 100 or more full-time employees: If you have 100 or more full-time employees, including full-time equivalent employees, you’re required to file electronically.
- ALEs (Applicable Large Employers): If you’re an ALE, you’re required to file Form 1095-C, regardless of the number of full-time employees.
What information is required on Form 1095-C?
Employers must report the following information on Form 1095-C:
- Employee name and Social Security number: The name and Social Security number of each employee who was eligible for health insurance coverage.
- Employer identification number (EIN): The EIN of the employer.
- Health insurance offer: Whether the employer offered health insurance coverage to the employee during the calendar year.
- Employee status: The employee’s status (full-time, part-time, or not offered coverage).
- Offer code: The offer code used to identify the type of health insurance coverage offered.
Penalties for non-compliance
Failing to file Form 1095-C on time can result in penalties, including:
- $100 per employee: A penalty of $100 per employee for each day the form is late, up to a maximum of $50,000.
- $2,500 per day: A penalty of $2,500 per day for repeated violations.
Best practices for filing Form 1095-C
To avoid penalties and ensure compliance, follow these best practices:
- Keep accurate records: Maintain accurate records of employee information, health insurance offers, and coverage.
- File the required forms: File Form 1095-C on time, either electronically or by paper.
- Review and correct errors: Review your forms for errors before submitting to ensure accuracy.
- Consult a professional: If you’re unsure about the requirements or need help with preparation, consult an HR professional or tax expert.
Common mistakes to avoid
Common mistakes include:
- Fear of the unknown: Not understanding the requirements or being afraid of penalties can lead to non-compliance.
- Inaccurate data: Providing inaccurate or incomplete data can lead to errors and penalties.
- Delays: Filing the report late or missing the deadline can result in penalties.
Conclusion
In conclusion, as an employer, it’s crucial to understand your obligations regarding Form 1095-C. With this article, you should have a better understanding of the requirements, who is required to file, and best practices for compliance. Remember, failing to file Form 1095-C on time can result in penalties. Don’t hesitate to seek professional help if you’re unsure about the requirements or need assistance with preparation.
Table: Summary of Key Requirements
| Employer Size | Number of Full-Time Employees | Electronic Filing Required |
|---|---|---|
| Small | 50 or more | No |
| Large | 100 or more | Yes |
| ALE | N/A | Yes |
Bullets: Key Deadlines and Penalties
- January 31, 2023: Deadline for filing Form 1095-C
- $100 per employee: Penalty for non-compliance (up to $50,000)
- $2,500 per day: Penalty for repeated violations