In September, the Internal Revenue Service introduced the 1094-C and 1095-C forms, which should be applied towards 2017 mandatory reporting. Below is what you need to know about these documents and how they should be used.
What is the 1094C And 1095C?
These forms provide information to employees regarding the healthcare benefits which are provided by their employers. It may also inform employees of whether or not they are enrolled in a specific program. The form is distributed to full time workers who were employed by a large employer (an employer that has 50 employees or more) within the previous year. Part time employees may also receive this form if their employer provided coverage which is self-insured and an employee or member of their family was enrolled.
The 1094 is basically the cover sheet for 1095C forms. It will showcase information regarding the employer, the address of their business, telephone number and EAD, or employer identification number. The 1094 will also reveal the number of employees the employer has, the name of the contact person and the manner in which the 1095 forms are being distributed. The IRS needs the 1094 and 1095 since it plays a key role in the enforcement of the ACA.
Businesses which must provide insurance to their workers, but fail to do so, may be responsible for paying fines. Through 1095 form collection, the IRS can monitor which employers are and are not providing coverage to their employees.
Why Were These Documents Introduced?
These forms are associated with the Affordable Care Act, for Applicable Large Employer groups. They are responsible for fulfilling to IRS reporting requirements, specifically the 6056 and 6055 code section. They answer three important questions, such as who was provided healthcare benefits; did it provide the minimum value and was it cost effective?
There are a number of ways in which these 2017 forms differ from previous versions. While they are very similar to their 2016 predecessors, the 1094 has eliminated a number of options in Part 2. For instance, Transition Relief is no longer applicable, and as such the form has changed these previous options, giving them a “Reserved” status. For 2017, these boxes should be unchecked.
Additional Changes To The 2017 Forms
Additional changes which are present in the updated 2017 forms include further instructions regarding mandate penalties and tax credits for recipients of the 1095, as well as penalty amounts which have been updated (increased). Instructions have also been changed regarding when an employer must provide accurate 1095C forms to employees for errors de minimis. A new requirement has also been listed in which each return should be printed in the landscape format.
There are deadlines for the reporting of these 2017 forms, which is February 28th for paper forms and March 31st– if one is filing the form electronically. The IRS has sometimes chosen to provide a deadline extension for the furnishing of statements to individual recipients which last from January 31st to March 2nd, but note that this might not always be the case.