Applicable Large Employers Must Send Full-Time Employees Form 1095-C

Under the Affordable Care Act, many employers are required to offer their full-time employees and the dependents of those employees health insurance. In addition to this, the employers must provide their workers with annual statements to show the insurance options available to them. To make this easier, the Internal Revenue Service (IRS) developed Form 1095-C.

Who Must Provide Health Coverage?

The new law says that applicable large employers (ALEs)  must offer coverage to their full-time employees. To be considered an ALE, a company must have a staff of at least 50 full-time workers or the equivalent of 50 full-time workers. If a person works at least 30 hours per week, he or she is considered a full-time worker. Most people are confused about what the equivalent provision is. An equivalent is two or more workers whose combined hours equal a full-time employee’s hours. For example, two workers who each work 20 hours per week would be considered the equivalent of one full-time worker. If a company had 100 employees who each worked 15 hours weekly, that company would be considered an ALE. All ALEs are required to use Form 1095-C.

Employees And Form 1095-C

Employees of ALEs will receive a Form 1095-C whether they participate in an employer’s insurance plan or not. A Form 1095-C includes the name of the employee, the name of the employer, the months when the employee was considered eligible for coverage and the monthly cost of the cheapest plan available. For ALEs not offering coverage to employees, their lack of coverage offerings must be indicated on the form. However, companies not offering coverage when they are required to do so will face substantial fees.

Form 1095-C And Form 1095-B

It is important to know the difference between these two forms. While Form 1095-C lists available coverage to an employee, Form 1095-B includes details about insurance plans, the employee’s family data and any specifications about who was covered. Employers send out Form 1095-C, and Form 1095-B is sent out by insurance companies. Self-insured companies that pay medical bills of workers directly instead of through insurance are required to send out both Form 1095-B and Form 1095-C. It is possible to conveniently combine the two forms on one document.

Mailing Form 1095-C

Form 1095-C became a mandatory form starting in the 2015 tax year, however their due dates have been temporarily extended this year.  For employees, the forms should be received by the end of March. This means most employers should plan to mail the forms no later than the middle of March. For the IRS, the forms must be received by the end of May if they are filed using paper forms. If possible, it is best to mail them to the IRS at the beginning of May. Employers have until the end of June to send the forms to the IRS if they choose to send them electronically. Employers who have to send out more than 250 forms are required to send them to the IRS electronically. However, employers with less than 250 forms to send can choose between electronic and paper filing.

It is important for employers to start preparing these forms immediately. To learn more about Form 1095-C and insurance plans, discuss contact one of our insurance advisors today.