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Reporting Employer-Provided Health Insurance Offer and Coverage

Posted on April 28, 2015

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Under the Patient Protection and Affordable Care Act, providers of minimum essential coverage during a calendar year must report certain coverage information to the Internal Revenue Service and to covered individuals. This article provides an overview of the reporting requirements and responsibilities.

Who is responsible for reporting?

Applicable large employers (those with 50 or more full-time employees, including full-time equivalent employees), must file information returns with the IRS [Form 1094-C] and also provide statements to full-time employees about health coverage the employer offered or to show the employer did not offer coverage [Form 1095-C].

What information must be reported?

The Form 1095-C provided to full-time employees (those working an average of at least 30 hours per week) requires:

  • Identification of each full-time employee for each month of the calendar year;
  • Identifying information for employer and employee such as name and address;
  • Information about the health coverage offered by month;
  • The employee’s share of the monthly premium for lowest-cost self-only minimum value coverage;
  • Months the employee was enrolled in the coverage;
  • Months the employer met an affordability safe harbor [employee’s premium cost not in excess of 9.5% of employee’s household income] with respect to an employee and whether other relief applies for an employee for a month [e.g. permitted waiting period; transition from variable hour]; and
  • If the employer offers a self-insured plan, information about the covered individuals enrolled in the plan, by month.

The Form 1094-C to be filed with the Internal Revenue Service requires:

  • Identifying information about the employer;
  • Information as to whether the employer offered coverage to 70% of full-time employees and their dependents in 2015 [after 2015 this threshold changes to 95%];
  • Total number of Forms 1095-C issued to employees;
  • Information about members of the aggregated applicable large employer group, if any [e.g. control or affiliated service group members];
  • Full-time employee counts by month;
  • Total employee counts by month [full and part-time]; and
  • Whether the employer is eligible for certain transition relief.

Reporting 2015 coverage information in 2016

Although reporting was voluntary for 2014, all applicable large employers are required to report health coverage information in early 2016 for calendar year 2015 coverage. Similar to the Form W-2 reporting deadline, the Forms 1095-C should be provided to employees by January 31, 2016. Form 1094-C must be filed with the Internal Revenue Service by February 28th [March 31st if filed electronically] with the information for the prior calendar year. Applicable large employers with 250 or more W-2s are required to submit the form electronically. Note: the reporting is based on the calendar year, not the plan year.

Why is the Reporting Important?

An employer that fails to comply with the reporting requirements is subject to failure to file penalties. There are regulations that provide relief based on reasonable cause [but not neglect]. The reporting is also used to determine whether the employer is subject to the shared responsibility payment if it failed to offer coverage to the requisite minimum full-time employees and their dependents [70% for 2015 and 95% thereafter], or if coverage was not affordable or did not provide minimum value.

What should you do as an employer?

Do not wait. Discuss the reporting with your group insurer to determine roles and responsibilities and any information gaps. If you maintain a self-insured plan, the filing and reporting obligations fall squarely on you, the employer, so establish the information recordkeeping on a monthly reporting basis to match the manner in which it must be reported.

David M.Mosier

David M. Mosier

David M. Mosier's practice includes business and tax transactions, retirement benefits, designing and drafting of employee pension and welfare benefit plans, and more.

dmosier@kmgslaw.com • 814-923-4878

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