IRS Releases Final Instructions to ACA Reporting Forms

Author: Marta Moakley, XpertHR Legal Editor

February 12, 2015

The IRS has released the final instructions to Forms 1094-C and 1095-C and Forms 1094-B and 1095-B, which were released in draft form in 2014. Employers are required to complete and file the forms with the IRS to report on their employee health care coverage, as required by the Affordable Care Act (ACA) and Internal Revenue Code § 6055 and § 6056.

Employers must begin filing the forms in 2016 for the 2015 tax year. While filing for tax year 2014 is not required, an employer may voluntarily file in 2015 for the 2014 tax year in preparation for the first required filing in 2016.

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 equivalent employees. Employers with 50 or more full-time employees (including full-time equivalent employees) are subject to the employer shared responsibility provisions. These employers:

  • Must file Form 1095-C with the IRS for each full-time employee; and
  • Provide a copy of Form 1095-C to each of those employees.

Forms 1094-C and 1095-C are used to determine whether an employer owes a payment under the pay or play provisions. In addition, Form 1095-C is used to determine the eligibility of employees for the premium tax credit.

Form 1095-B, along with transmittal Form 1094-B, is used by health insurance issuers or carriers to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and, therefore, are not liable for the individual shared responsibility payment. Minimum essential coverage includes government-sponsored programs, eligible employer-sponsored plans, individual market plans and any covered miscellaneous coverage.