The Affordable Care Act requires large employers—defined as having at least 50 employees—to file information returns with the IRS and to provide statements to employees about the employers’ health insurance. Coding does help with reporting offers of health insurance coverage.
“There is no real magic formula to simplify the process” of reporting offers of health insurance coverage, according to Richard Asensio, vice president of compliance at Burnham Benefits Insurance Services in Irvine, Calif. But certain coding can help.
“The concept for preparing Form 1094-C (transmittal form) and Form 1095-C (employee statement evidencing offer of coverage) is similar to that of preparing Form W-3 and W-2 that many benefits and payroll employees are already familiar with,” he remarked.
“Form 1095-C must be completed for each full-time employee, specifically lines 14-16 in Section II,” Asensio added. “Note that if the large employer sponsors a self-funded plan, to satisfy the reporting and disclosure requirements under Code Section 6055, it will also need to capture by month in Section III, whether or not the employee and their dependents were actually enrolled in the plan, as well as include nonemployees such as retirees and COBRA beneficiaries, and part-time employees who are eligible for and actually enrolled in the employer’s plan. Thus, for a self-funded employer, Form 1095-Cs will also need to be prepared and filed for its non-full-time population, if they are actually covered” by the plan.
Asensio explained that the initial steps for an employer in completing the Form 1095-C should be to assess all of its full-time employee population and classify individuals into various categories, such as those:
- Employed and offered coverage throughout the calendar year.
- Employed and not offered coverage throughout the year.
- Hired during the year.
- Terminated during the year.
Also, classify those:
- Who gained full-time status during the year.
- Who lost full-time status during the year.
“The reason for this is that in most instances, the preparation of the Form 1095-C for employees within each of these categories should be similar,” Asensio explained. “This will make it easier to complete the forms.”
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Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
