What is Form 1095-C?
Applicable Large Employers (ALEs), who are employers with 50 or more full-time employees, are the ones who should provide these forms to their full-time employees. These employees must have worked at least 30 hours per week to be considered full-time.
Full-time equivalents, who are part-timers who join their working hours to make the requisite thirty per week, are also entitled to receive employer-issued insurance. ALEs are made up of both full-time employees and full-time equivalent employees.
ALEs who decline to provide healthcare insurance for their employees will still receive form 1095-Cs by virtue of their Affordable Care Act commitment. They may also be open to receiving penalties from the IRS, such as:
- Not filing the returns - $280 per return, up to $3,426,000
- Providing false employee information - $280 per return, up to the same limit, that is, $3,426,000.
These penalties can be waived or ignored entirely if the employer provides sufficient reasonable cause for not complying with IRS requirements.
When employers file Form 1095-C: Employer-Provided Health Insurance Offer and Coverage, they should also provide Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns to the IRS.
What are the contents of Form 1095-C?
Since 2015, sending out Form 1095-Cs has been compulsory for all ALEs. They must send these forms to their employees and another copy to the IRS. While the due date in 2021 was January, a law saw it being extended to March. ALEs with more than 250 employee forms to send out are required to do so electronically.
The IRS will use the form to dispatch premium tax credits to the employee and ensure employers comply with the Affordable Care Act.
Form 1095-C’s contents are primarily threefold:
Part I: Employee and Applicable Large Employer Member (Employer) Information
This section contains necessary information such as:
- Name of employee
- Social Security Number (SSN)
- Name of employer
- Employer Identification Number (EIN)
For both the employee and employer:
- Street address
- City or town
- State or province
- Country and ZIP
Part II: Employee Offer of Coverage
Here, vital details of what the cover and coverage entail are listed. Information to be filled includes:
- What the offer of coverage is, as a code
- What the employee is expected to contribute
- What reliefs may be provided, such as Safe Harbor
- The employee’s age as of January 1
- On which month the plan starts
Part III: Covered Individuals
Here, one includes all individuals legally covered by the health insurance, such as family members other than the employees. One should provide each recipient’s name, Social Security Number, and date of birth, among other essential credentials.
Covered Individuals: Who receives Form 1095-C?
Form 1095-C is only sent to full-time employees enrolled in an employer’s health insurance coverage. They will receive it during the current tax year by January 31. Employees need not attach it to their tax return but could save it for future purposes.
Other individuals who should expect to see form 1095-C in their mail include retirees enrolled in their former employer’s health insurance program, so long as it is within the same tax year. This may not be the same for all companies.
Further, if an individual has worked for more than one employer during a tax year and the employer-provided health insurance, they can receive more than one form 1095-C. The other such provision is if you worked for an employer with different companies, you might get individual Form 1095-Cs from these companies.
Part-time employers, that is, those who work for less than 30 hours, are not liable to receive employer-based health insurance by default. This then means that they should not receive Form 1095-C.
Other cases where individuals may not receive Form 1095-C is when they receive other compatriot forms, such as Form 1095-A and Form 1095-B. If an individual was not the primary insured by the employer-provided health insurance, then they will not receive Form1095-C.
Exemptions
There have been proposed laws to have employees who are not full-time enjoy employer-provided health insurance, just as their full-time compatriots. It was also discussed if the exemption would be extended to individuals who are not employed by the ALEs but seek health insurance from these companies; some ALEs provide their in-house health insurance without including third parties. However, these individuals seeking to be included need to meet certain conditions.
For ALEs who feel that the deadline to file these forms has come a bit too early, they could file Form 8809: Application for Extension of Time to File Information Returns to get a 30-day extension of the deadline. The IRS allows this automatic extension under specific circumstances.
Similar forms
Form 1095-A
You receive a form 1095-A only if your health insurance provider is a health insurance marketplace. This form will also include any applicable Premium Tax Credits you received on your healthcare insurance.
Form 1095-B
You will receive a form 1095-B if smaller groups provide you with health insurance.
Key Takeaways
- Form 1095-C is only for employer-provided health insurance.
- Only ALEs are required by law to send form 1095-Cs.
- Form 1095-C will not be used in filing tax returns, although it might help provide the necessary information.
- You will receive a Form 1095-C if you are eligible, even if you are not an active employee.
- Two part-time employees can join their working hours to make them within the above 30 hours threshold and therefore be eligible to receive employer-provided health insurance.
