Employee responsibility with Form 1095-C

There can be a tendency to focus on the employer side of IRS Affordable Care Act reporting, given the voluminous requirements. However, it’s now time to look at it from the employee perspective. And for many workers, it will be soon time to keep an eye on the mailbox, for IRS Form 1095-C could be coming.

What is Form 1095-C? It summarizes the health insurance coverage offers extended to full-time employees by applicable large employers (ALEs). As a general rule, ALEs have at least 50 full-time employees or equivalents, and the firms must offer health insurance to these employees. According to IRS guidance, Form 1095-C helps determine whether both employee and employer have complied with the “shared responsibility” clause of the Affordable Care Act. If an ALE doesn’t offer health insurance when required, it is subject to penalty. The same goes for an individual who declines coverage when required; hence the need for Form 1095-C, which will be needed to complete the person’s income tax filing. Also, as the IRS notes, Form 1095-C determines whether an individual qualifies for the premium tax credit, which aims to reduce the burden of purchasing health insurance. (Note: self-insured firms with less than 50 employees furnish IRS Form 1095-B for their employees.)

ALEs must mail Form 1095-C to employees by Monday, February 1, 2016 for tax year 2015. So for employees, it pays to be the lookout for Form 1095-C early in 2016. And as an employer, it’s vital to understand what is required from the IRS regarding these forms. Being in compliance includes filling out Form 1094-C accurately and ensuring proper distribution of Form 1095-C to employees.

The Plexus Groupe is providing filing, consulting and preparation services for IRS Forms 1094 and 1095. If you would like more information on reporting issues, call at 847.307.6100 (Chicago), 972-770-5010 (Dallas) or 405-241-9462 (Oklahoma City) to a Plexus professional, or visit us on the web at plexusgroupe.com.

References 2015 Instructions for Forms 1094-C and 1095-C. Department of the Treasury, Internal Revenue Service.

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. Department of the Treasury, Internal Revenue Service.

IRS.gov. “The Premium Tax Credit,” October 30, 2015.