Information Reporting by Applicable Large Employers
The employer mandate for companies with over 50 employees requires all employers to track and report health coverage for all employees. The purpose is to determine who is eligible for employer sponsored health insurance, if coverage was offered, if the coverage meets the affordability calculation (9.5%), if an employee is eligible for a subsidy and if the employer has to pay a penalty. The information is provided to the IRS on the "C" series forms. The 1095-C is the statement to the employee to determine whether for each month of the calendar year, they may claim the premium tax credit on their individual tax return. The 1094-C is the form the ALE must complete which reports information about the health coverage, if any, that was offered to full-time employees, even if no coverage was offered.
This requires employees to be put into one of three categories in order to track the necessary data to complete a 1095-C:
- Full-time employee regularly working more than 30 hours and eligible for health insurance
- Part-time employee regularly working less than 30 hours and not eligible for health insurance
- Variable hour employee (actual hours and health plan eligibility unknown)
Employee Navigator has added a variable hour tracking feature to our software which enables companies to set-up initial measurement periods, stability periods and administrative periods for new and existing employees. Thus, we are able to report the appropriate code for 1095-C Line 14. Our first release of software is designed to have a 12 month stability period (and standard measurement period) and is designed to coincide with the open enrollment period of the employer. Thus, an employer with a January 1 Open Enrollment effective date will have a measurement period of October 1 through September 30 and a 90 day administrative period making those employees eligible to enroll on January 1. While some employers will opt for shorter measurement periods, the administrative burden for employers of calculating multiple measurement periods is impractical and is not part of our initial release.
Our system permits employers to track hours on a weekly (30) or monthly (130) basis. Additionally, you are able to set your tracking method as daily (import of hours worked via time clock data), weekly and monthly and support for importing hours or adding them through our user interface will be part of our initial release. Our intention was to design the software in a way as to enable employers to use the variable hour tracking even if they are not using our platform to enroll in benefits.
The 1095 is the employee form which provides information to the IRS about the health coverage that is offered to the employee and the cost of the employee only lowest cost plan. If an employee was eligible to enroll in an employer sponsored health plan, and the cost of the coverage is affordable, the employee would not be eligible to receive a premium tax credit if they chose to enroll in an individual marketplace plan.
Please see the following article for more information: Employee Navigator's ACA Services.
The 1095-C is required to be furnished to all full time employees by January 31st, 2016 for the 2015 calendar year.
Having Employee Navigator produce your 1095s is optional.
Categorization of an employee is necessary for completing a 1095-C form. We have created an ACA/Statutory Classification section in the employee record that will drive employee eligibility maintenance.
The 1094-C form is the employer form, which is the aggregated transmittal which tells the IRS important information on the health coverage that was offered, or not offered, to the employees. Employee Navigator will not charge a separate fee for the 1094-C forms. An employer who purchases the 1095-C reporting will get the aggregate 1094-C transmitted to the IRS.
The IRS needs copies of both the 1095-C and the 1094-C by February 28th (March 31st if filing electronically), 2016 for the 2015 calendar year.
Information Reporting by Providers of Minimum Essential Coverage
Providers of minimum essential coverage to an individual are required to report to the IRS and the covered individual which verifies the months in which the individuals were covered by minimum essential coverage; therefore satisfying the individual shared responsibility requirements. The reporting requirements to the IRS are on the "B" series forms. The 1095-B is reported to the covered individuals and the IRS. The 1094-B form is the aggregated transmittal to the IRS of all covered individuals.