The IRS has released draft 2015 instructions for the B-Series and C-Series reporting forms (Forms 1094-B, 1095-B, 1094-C and 1095-C) that will be used by employers and coverage providers to report certain information to full-time employees and the Internal Revenue Service (IRS).
By way of background, the Affordable Care Act (ACA) added Sections 6055 and 6056 to the Internal Revenue Code. These new sections require employers, plans, and health insurance issuers to report health coverage information to the IRS and to participants annually. The Section 6055 reporting requirements apply to insurers, employers that sponsor self-insured group health plans, and other entities that provide minimum essential coverage (such as multiemployer plans). The Section 6056 reporting requirements apply to “applicable large employers” or “ALEs” (generally, employers with 50 or more full-time employees) and require reporting of health care coverage provided to the employer’s full-time employees.
Reporting under Sections 6055 and 6056 will involve one or both of two sets of forms – the “B-Series” (Forms 1094-B and 1095-B) and the “C-Series” (Forms 1094-C and 1095-C). Each set of forms includes a transmittal form (Forms 1094-B and 1094-C), which serves as a cover page and provides aggregate information, and an individualized form (Forms 1095-B and 1095-C) for each employee for whom the employer is required to report.
ACA reporting became mandatory for responsible entities starting in 2015. The first forms will be provided in early 2016 reflecting the 2015 calendar year. The forms that must be filed and distributed depend on whether the employer is an ALE and the type of coverage provided. Employers filing 250 or more of a particular form are required to file with the IRS electronically. The table on the following page summarizes the responsible parties and forms applicable to the ACA’s reporting requirements.
| Responsible Entity | Fully Insured Plan | Self-Insured Plan |
| Applicable Large Employer (ALE)50 or more full-time equivalent employees on average in prior calendar year | Forms 1094-C and 1095-C(Parts I and II of Form 1095-C) | Forms 1094-C and 1095-C(Parts I, II and III of Form 1095-C)Either B-Series or C-Series Forms for covered non-employees |
| Non-ALEFewer than 50 full-time equivalent employees on average in prior calendar year | Not required to file | Forms 1094-B and 1095-B |
| Insurance Carrier | Forms 1094-B and 1095-B | Not Applicable |
2015 Draft Instructions
The draft forms and instructions can be found here:
Highlights of changes/clarifications contained in the draft forms and instructions are discussed below.
- Form Revisions. For 2015, form 1094-C is reorganized to move line 19 (the Authoritative Transmittal question) into Part I of the form. Line 23 of Part III of form 1094-C is also revised to allow for an entry in the “All 12 Months field.” Form 1095-C is revised to include a first month of the plan year indicator (plan start month) in Part II and “Covered Individuals Continuation Sheet” in Part III.
- Increased Penalties. The draft instructions reflect the newly increased penalty structure (generally increasing penalties from $100 per return to $250 per return, and increasing the penalty cap from $1.5M to $3M).
- Hand Delivery. The draft instructions clarify that hand delivery is an acceptable method of delivery. Electronic delivery is permissible with the recipient’s affirmative consent.
- ALE Determination Transition Relief. The draft instructions reiterate that employers may determine their ALE status for 2015 over a period of at least six consecutive months in 2014 (rather than having to use the entire calendar year when determining average employee count).
- COBRA Coverage (for Terminating Employees). The instructions provide that COBRA coverage offered to a terminating employee is reported as an offer of coverage only if the terminating employee enrolls in COBRA. If the former employee does not enroll in COBRA, the employer should use code 1H in line 14 of form 1095-C (the “no offer” code) even if the employee’s spouse or dependent enrolls in COBRA. COBRA Coverage (for Reductions in Hours). The instructions provide that COBRA coverage offered to an employee who has experienced a reduction in hours that resulted in a loss of coverage under the plan is reported in the same manner and using the same code as an offer of that type of coverage to any other active employee.
- Multiemployer Plans. The draft instructions provide relief for employers reporting on offers of coverage made under a multiemployer plan. The instructions direct ALEs to use code 1H on line 14 of form 1095-C for any month for which the employer enters code 2E on line 16 of form 1095-C (indicating that the employer is eligible for relief under the interim guidance for multiemployer plans). This allows employers to enter Code 1H regardless of whether coverage was actually offered under the multiemployer plan (in case the employer is unable to obtain such information from the multiemployer plan).
- Filing Extensions (for Returns to the IRS). Employers may obtain automatic extensions of time to file the applicable returns with the IRS; however, extensions of time to provide the employee statement (e.g., 1095-B or 1095-C) are more limited. The draft instructions provide that entities filing form 8809 before the returns are due are granted an automatic 30-day extension. An additional 30-day hardship extension may be requested (see the instructions for form 8809 for more information).
- Filing Extensions (for Employee Statements). The draft instructions allow employers to request an extension of time to furnish the employee statements by sending a letter to the IRS. The letter must include certain identifying information (e.g., filer name, address and TIN) along with the reason for the delay. The request must be postmarked by the date on which the statements are due to the recipients. If approved, the extension will generally be for a maximum of 30 days.
- Waiver of Electronic Filing Requirement. The draft instructions allow employers to request a waiver from having to file information returns electronically via Form 8508. The form must be filed at least 45 days before the due date of the returns. An employer cannot apply for a waiver for more than one year at a time.
Employers should continue to work closely with their insurance broker and other trusted advisors when determining how their organization will address these new requirements.
About The Author. This alert was prepared for THE INSURANCE GROUP by Peter Marathas. Mr. Marathas is an ERISA and Executive Compensation lawyer with over 20 years’ experience assisting clients nationally with benefits and compensation matters. He is a partner at Marathas Barrow & Weatherhead LLP, a premier employee benefits, executive compensation and employment law firm. He can be reached at pmarathas@marbarlaw.com or (617) 830-5456.
