IRS Releases Draft Instructions to ACA Reporting Forms

Author: Gloria Ju

September 4, 2014

The IRS has released draft instructions for employers to use when completing the forms required by the Affordable Care Act (ACA) under Internal Revenue Code § 6055 and § 6056. An employer must use these forms to report to the Internal Revenue Service (IRS) on its employee health care coverage.

An employer subject to the ACA's employer shared responsibility provisions (also known as the employer, or pay or play, mandate) must file Form 1094-C, which provides summary information to the IRS on the health coverage the employer offered (or did not offer) to each of its full-time employees. The employer must also file Form 1095-C with the IRS for each full-time employee and furnish a copy of Form 1095-C to each of those employees.

The employer mandate generally covers employers that had 50 or more full-time employees (including full-time equivalent employees) in the prior calendar year. When the mandate takes effect in 2015, however, it will only apply to employers of 100 or more employees. Although these employers are not required to begin reporting until 2016, they will have to begin collecting the information that must be reported in January 2015. In January 2016, the mandate kicks in for employers of 50 or more employees, with reporting required in 2017.

Health insurance issuers or carriers must use Forms 1094-B and 1095-B to report certain information to the IRS about individuals who are covered by minimum essential coverage and, therefore, are not liable for the individual shared responsibility payment. The insurers or carriers must provide a copy of Form 1095-B to each of those individuals.

The IRS had released drafts of the forms in July without the instructions, and had announced then that it expects to finalize both the forms and the instructions later this year.