Since we assume if you are reading this that you are an avid reader of our blog, you undoubtedly know that all large employers have to send new IRS Form 1095-C to their full-time employees by March 31st. See our prior post for more detail about the delay. If you’re an employer that sponsors a self-funded plan, you have to complete additional information on the Form 1095-C, but if you are an employer that sponsors a fully-insured plan, your employees participating in the plan will also receive a Form 1095-B from the insurance carrier.
If you are responsible for preparation or distribution of your companies Forms, you probably know more than you ever hoped about these new reporting rules. But have you considered that your employees may know nothing about these forms? Your average employee will likely get this new Form in the mail and have no idea what it is or what they are supposed to do with it. It will be more confusing if they receive a Form 1095-B and Form 1095-C. Some will throw them in the stack of paper they plan to give to their tax preparer and let them figure it out, some will disregard them and a few may try and read them and determine what it means. If you have looked at the details of the Form, you will know that looking at it won’t give the employee much assistance in what its purpose is or what they are supposed to do with it. So then they will probably call you. In order to prevent a bunch of calls on the new Form, you may want to consider sending a communication to your employees explaining that they will be receiving a new Form or Forms and the purpose of the Forms. While you are not required to provide any notification outside of the Form itself, if may save you time and headaches later if you proactively send a letter about the Form(s) to your employees. If you decide to send a communication to employees explaining the Form(s), it is not too early to do it now.
If you have employees who do not procrastinate on their taxes (probably only those expecting a refund and not owing the tax man like me), they may start calling now inquiring why they haven’t yet received their Form 1095-C from you because their tax preparer or tax preparation software will be asking for a copy. Sending a letter can explain the purpose and also the delay.