The IRS has released the 2015 reporting Forms for the Affordable Care Act (ACA). These Forms include the 1094-B, 1095-B, 1094-C, and the 1095-C. The 1095-B is for reporting Health Coverage and will generally be used by the Insurance Provider, while the 1094-B is the Transmittal of Health Coverage Information Returns. The purpose of the 1095-B is to prove to the IRS that each individual has acquired insurance on a monthly basis, thus satisfying the individual mandate requirement. The 1095-C is the Employer-Provided Health Insurance Offer and Coverage and the 1094-C is the Transmittal of Employer–Provided Health Insurance Offer and Coverage Information Returns. The purpose of the 1095-C is to enforce the employer mandate, which requires applicable large employers (ALEs) to offer a certain level of health care coverage to their full time employees. ALEs are required to report on the 1095-C to prove to the IRS that they have in fact met their obligation of offering such coverage to their full-time employees. In addition to reporting a 1095-C for each full time employee, ALEs must report a 1094-C that provides aggregate data about the ALE and the offer and coverage information as reported in the 1095-Cs. There were numerous noteworthy changes to the 2015 Forms and accompanying Instructions from the 2014 versions. Listed below are some of these modifications, which have helped to provide further guidance into the reporting responsibilities and how to stay compliant:
- Continuation Sheet: One of the significant updates is the addition of the Continuation Sheet for Covered Individuals located in Part IV on the 1095-B and Part III on the 1095-C. The purpose of these Continuation Sheets is for reporting when there are more than 6 covered individuals; this should only be populated when needed. The 2014 Forms only had spots for up to 6 covered individuals, which could be problematic for larger families.
- Extension of Time to File: Both Forms added directions on how to request an Extension of Time to File. An automatic 30-day extension of time to file will be provided by completing Form 8809, Application For Extension of Time to File Information Returns. No explanation is required for this automatic 30-day extension request. An additional 30-day extension is possible, but it is not automatic and will only be provided for certain hardship conditions.
- Substitute Forms: Substitute Forms and statements are permitted to be used when filing these ACA forms with the IRS or furnishing statements to recipients. For information on this process please see Publication 5223, which explains the requirement for format and consent of substitute statements.
- Corrections: There were instructions added for filing corrected returns for all the Forms. Although each form has its own specific set of instructions, generally, when filed with the IRS, one must fully complete a 1095 and then enter an “X” in the CORRECTED checkbox. If you are correcting a Form 1095-B that was previously furnished to a recipient, but not filed with the IRS, write CORRECTED on the new Form 1095-B furnished to the recipient.
- Penalties: There has been a whole sections added on applicable penalties for failure to file correct information returns and failure to furnish correct payee statements. These penalties can be pretty severe amounting to a penalty of $250 for each return where a failure occurred. However, for 2015 reporting, penalties will not be imposed on a filer for reporting incorrect or incomplete information if the filer can show that that it made good faith efforts to comply with the information reporting requirements for 2015.
- Form 1095-C: A box was added for the Plan Start Month. This will be optional for 2015, but is expected to be mandatory for 2016.
For more information please see the following Forms and Instructions
- Form 1094-B: http://www.irs.gov/pub/irs-pdf/f1094b.pdf
- Form 1095-B: http://www.irs.gov/pub/irs-pdf/f1095b.pdf
- Instructions for Forms 1094-B and 1095-B: http://www.irs.gov/pub/irs-pdf/i109495b.pdf
- Form 1094-C: http://www.irs.gov/pub/irs-pdf/f1094c.pdf
- Form 1095-C: http://www.irs.gov/pub/irs-pdf/f1095c.pdf
- Instructions for Forms 1094-C and 1095-C: http://www.irs.gov/pub/irs-pdf/i109495c.pdf
