August 7, 2015
IRS Releases Revised Drafts of 2015 PPACA Employer Reporting Forms, Instructions
On August 7, the Internal Revenue Services (IRS) released revised drafts of 2015 Forms 1095-B and 1095-C as well as draft 2015 sets of Instructions for the Forms 1094-B and 1095-B and for the Forms 1094-C and 1095-C. The forms will be used to fulfill the requirements specified in final regulations implementing the reporting of minimum essential coverage (MEC) under Code Section 6055 and the reporting of health insurance coverage under Code Section 6056.
- 2015 Draft IRS Form 1095-C: Employer-Provided Health Insurance Offer and Coverage is used to fulfill the requirement under Code Section 6055 that every applicable large employer (generally, an employer that employed on average at least 50 full-time employees or equivalents) file a return with the IRS that reports the terms and conditions of the health care coverage provided to the employer's full-time employees during the year
- 2015 Draft IRS Form 1095-B: Health Coverage is used to fulfill the requirement under Code Section 6056 that every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs and other entities that provide minimum essential coverage to file annual returns reporting certain information for each individual for whom minimum essential coverage is provided and to provide a copy of the return to the individual.
(Please see the June 18, 2015, Benefits Byte for a discussion of the previously released draft versions of the forms.)
Based upon a review of the new draft forms, it does not appear that the IRS made any major changes to the draft forms themselves; however, the IRS did make some notable changes to the instructions, including:
- The draft instructions for the “B” forms state that applicable large employers (ALEs) may use the “B” forms instead of the “C” forms to report coverage of individuals who aren’t full-time employees for any month during the year. Oddly, this change is not reflected in the draft instructions for the “C” forms, which still require that an ALE report for employees (both full- and part-time) enrolled in self-insured coverage on the “C” forms and can only report for non-employees on the “B” forms.
- For minimum essential coverage reporting, the regulations provide that entities do not have to report supplemental coverage, which is defined as (1) coverage that supplements a government-sponsored program, such as Medicare or TRICARE and (2) coverage of an individual in more than one plan or program by the same plan sponsor. Many employers interpreted the regulatory reference to “plan sponsor” to mean the sponsor of the plan. However, the instructions clarify that to have the same plan sponsor for purposes of the supplemental coverage rule, the coverages must otherwise be subject to reporting by the same reporting entity. Thus, for example, a self-insured Health Reimbursement Arrangement (HRA) and an insured group health plan that covers employees of the same employer are not supplemental per the new draft instructions.
- Filers of the “B” and “C” forms can get an automatic 30-day extension to file the forms with the IRS by submitting a Form 8809 on or before the due date of the return. Filers can apply for a 30-day extension to furnish the forms to the individuals by sending a letter to the IRS that includes certain specific information on or before the due date for providing the forms to the individuals.
- The draft instructions provide details on when and how to file/furnish corrected paper forms and direct filers to IRS Publication 5125 for information on correcting electronically filed forms.
- The draft instructions clarify that both the “B” and “C” forms may be hand delivered to individuals.
- For employer mandate reporting and for reporting offers of coverage on Line 14 of the Form 1095-C for the 2015 tax year, an employer using the multiemployer arrangement interim guidance can use code 1H (no offer) for any month for which it enters code 2E (multiemployer plan relief) on line 16, without regard to whether the employee was actually eligible to enroll in coverage under the multiemployer plan. The 2014 instructions required that the employer report the code for the actual coverage offered to the employee where the employer qualified for the relief. This change for 2015 reporting should be welcome news to employers.
- For employer mandate reporting, the draft instructions include important clarifications on how to report for COBRA participants.
As stated above, the forms and instructions are only in draft form at present and are subject to further changes prior to being made final. The Council will be reviewing the new draft forms and instructions carefully and appreciate any member feedback on these developments. For more information, contact Katy Spangler, senior vice president, health policy, or Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.