Employer Reporting Refresher for 2021 Filing

As we get nearer to the deadline for 2021 ACA reporting, we wanted to provide you with a refresher of some of the requirements for the reporting year. 

IRC Section 6055 requires insurance carriers and self-funded employers to report to the IRS and to covered individuals that the persons were covered by minimum essential coverage. Forms 1094-B and Form 1095-B are used to report this information.

IRC Section 6056 requires applicable large employers (ALEs) who are subject to the employer mandate or “pay or play” rules to report information regarding their offer of health coverage to full-time employees by filing a Form 1094-C and Form 1095-C with the IRS, and distributing a copy of the 1095-C to their full-time employees.

Who Should Be Reporting?
ALEs must comply with the reporting requirements regardless of whether they sponsor a fully insured or self-funded plan. An employer is considered an ALE for a calendar year, if they employ, on average, at least 50 full-time employees, including full-time equivalent employees during the previous calendar year. All types of employers can be ALEs, including tax-exempt organizations and government entities.

Non-ALEs that sponsor a self-funded plan (this includes a level-funded plan) must comply with the 6055 reporting requirements. This means using the B Forms whereas an ALE that sponsors a self-funded health plan will use the C Forms.

Reporting Forms
1094-B. This form is a transmittal form for the 1095-B forms that are sent to the IRS. It requests the following information:

  • Filer’s name and address
  • Employer Identification Number (EIN)
  • Employer contact
  • Total number of 1095-Bs transmitted with the Form 1094-B,
  • Signature, title and date

1095-B. This form is used by insurance carriers and small, self-funded employers. It is used to provide actual enrollment information of the individual and family members enrolled in minimum essential coverage.

1094-C. This form is a transmittal form for the 1095-C forms that are sent to the IRS. The information on this form includes:

  • Contact and identifying information of the employer
  • Whether the employer offered minimum essential coverage to at least 95% of its full-time employees for each month of the calendar year
  • The total number of employees in each month

1095-C. ALEs (both fully insured or self-funded), must complete this form for every full-time employee, submit it to the IRS and furnish a copy to each employee. Self-insured plans will also need to complete this form for any individual enrolled in coverage (i.e., part-time employees). The form requires the employer to detail the offer of coverage to the employee in order to avoid potential penalties.

Filing Deadlines
The 1095-B and 1095-C forms must be distributed to individuals by January 31, 2022. Employers can deliver the forms to individuals by mail, in-person, or electronically (with consent).

If an employer is going to paper file with the IRS, that must be done by February 28, 2022 (March 31, 2022, if filing electronically).

Electronic filing will be mandatory if an employer is filing 250 or more Forms 1095-C and must be done via the ACA Information Returns (AIR) System.