The IRS has updated two sets of Q&As on its website to clarify a variety of issues related to ACA reporting on Forms 1094-C and 1095-C. Here are some highlights:
- ALE With No Full-Time Employees. An employer that qualifies as an "ALE member" does not have to report under Code Section 6056 if the employer does not have any full-time employees for any month of the year. This might happen, for example, if an entity is part of a larger group of entities that collectively employ 50 or more FTEs, but the particular entity in question has no full-time employees. This clarification would allow the employer to avoid filing Forms 1094-C and 1095-C, unless the employer actually provides coverage to one or more part-time employees under a self-insured plan sponsored by the employer.
- Hand Delivery of Form 1095-C. An employer that is required to distribute Form 1095-C to an employee may hand deliver the Form 1095-C. It was unclear under prior guidance whether the only permitted distribution methods were first class mail and electronic delivery (with consent).
- Employee's SSN Required for Form 1095-C. When reporting individuals to whom coverage is provided (either on Form 1095-B or Part III of Form 1095-C), there is an option to use an individual's date of birth if the individual has not provided an SSN. However, when providing Form 1095-C to an employee, the employer must have the employee's SSN to enter in line 2 of the 1095-C. There is no option for using the employee's date of birth in line 2 of the 1095-C.
- Reporting COBRA Coverage on Part II of Form 1095-C. There have been many questions regarding the reporting of COBRA coverage on Part II of Form 1095-C, particularly with respect to whether an offer of COBRA coverage is treated as an "offer of coverage." These Q&As provide some clarification. In general, the treatment depends on whether the individual is a current employee or a former employee. In the case of COBRA coverage offered to a former employee, the COBRA coverage will be treated as an "offer of coverage" only for the months in which the former employee is actually enrolled in COBRA coverage. In the case of COBRA coverage offered to a current employee, the COBRA coverage will be treated as an "offer of coverage" whether or not the employee actually enrolls in COBRA coverage.
By way of reminder, reporting on Forms 1094-C and 1095-C is required for 2015 for all employers that qualify as "ALE members," unless they have no full-time employees during any month of the year. An ALE member is any employer that employs an average of 50 or more FTEs during the immediately preceding calendar year, looking at both employees the employer employs directly and employees employed by members of a controlled or affiliated group that includes the employer.
Employers that sponsor self-insured health plans that provide minimum essential coverage will also be required to file forms reporting that coverage. In general that coverage will be reported on Form 1095-C as well, although in some cases coverage is reported on Form 1095-B.
Links to the updated IRS Q&As are here: