General Information About Forms 1095-B and 1095-C

All employers, private, government, non-profit and multi-employer groups that offer “applicable employer-sponsored coverage” have reporting requirements under the Affordable Care Act.

The recipient will need the forms to complete a tax return if they received a tax credit or are going to take a tax credit on the return or if there was a gap in coverage of more than three consecutive months. If these do not apply to the recipient, they will just need to check a box indicating they were offered coverage and keep the form with their tax records. The IRS uses the information to verify that individuals have minimum essential coverage (MEC) that complies with the individual responsibility requirement of the ACA or they may face a tax penalty.

If they or a family member are expecting to receive a Form 1095-A, they should wait to file the 2015 income tax return until they receive that form. However, it is not necessary to wait for Forms 1095-B or 1095-C in order to file. Some taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2015 tax return. While the information on these forms may assist in preparing a return, they are not required. Like last year, taxpayers can prepare and file their returns using other information about their health insurance. They should not attach any of these forms to their tax return.

Small employers that are not an ALE member, and offer an employer-sponsored health insurance plan through SHOP or otherwise are not subject to the employer shared responsibility provisions, including the offer of dependent coverage, including employer shared responsibility payments, and the employer information reporting provisions under section 4980H of the Internal Revenue Code (Code). If the employer had less than 50 full-time employees (49 and under) in 2015, the health insurance company will issue a 1095B to the employer’s SHOP plan member employee.

Small employers, less than 50 have a narrower set of reporting requirements. Note that small employers who sponsor a self-insured plan must report to the IRS.

For more information: https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions.

An ALE member who is also a CCSB plan member is subject to the employer shared responsibility provisions, including the offer of dependent coverage, including employer shared responsibility payments, and the employer information reporting provisions.

For more information: https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions

The Small Business (less than 50 full-time employees including full-time equivalents) reporting requirements of the Affordable Care Act includes businesses, tax-exempt organizations, and federal, state and local government entities.

Reporting Requirements of Small Business Employers:
Additional Medicare Tax went into effect in 2013 and applies to wages, compensation, and self-employment income above a threshold amount received in taxable years beginning after Dec. 31, 2012. You must withhold and report an additional 0.9 percent of Medicare Tax on employee wages or compensation that exceed $200,000.

W-2: Small Business Employers that provide "applicable employer-sponsored coverage" under a group health plan, such as a small group plan with Covered California, are required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2. The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee.

Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.

Self-Insured: Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover.

Common Ownership: If you have fewer than 50 full-time employees, but are a member of an ownership group with 50 or more full-time equivalent employees, you are subject to the rules for large employers.

For more information: https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions

IRS form 1095-B: Health Coverage: primarily completed by insurers, certain government-sponsored programs like Medicare and health insurance companies, including small employers that sponsor self-insured plans. Form 1095-B is used to report certain information to the IRS and to taxpayers about every person who was covered by minimum essential coverage (MEC) in 2015. The issuer will provide one return for each responsible individual.

The health insurance companies of Covered California for Small Business for small employers (less than 50 full-time employees) will issue 1095-Bs to each responsible individual. Individuals should contact the issuing party with questions.

Medi-Cal recipients who have received a 1095-B and need assistance should contact your county human services agency or call the Medi-Cal 1095-B Help Desk 1-844-357-0883.

For more information: http://www.dhcs.ca.gov/services/medi-cal/Pages/CountyOffices.aspx

The form contains personal information on the responsible individual, generally the employee. For more information: https://www.irs.gov/uac/About-Form-1095-B

IRS Form 1095-C: Employer-Provided Health Insurance Offer and Coverage Insurance: Large Employer-Sponsored Health Insurance: filed and furnished by the employer to any employee of the applicable large employer who is a full-time employee for one or more months of the calendar year.

The ALE (at least 50 full-time employees) of plan members in a Covered California for Small Business (CCSB) group plan will issue a 1095-C to each responsible individual.

Individuals should contact the issuing party with questions.

The form contains personal information on the responsible individual, generally the employee; the employees share of the monthly premium for lowest-cost self-only minimum value coverage; the months the employee was enrolled in insurance; months the employer met an affordability safe harbor with respect to an employee and whether other relief applies for an employee for a month; and, if the employer offers a self-insured plan, information about the covered individuals enrolled in the health and dental plan by month. For more information: https://www.irs.gov/uac/About-Form-1095-C

The Affordable Care Act, requires certain employers to offer health insurance to full-time employees and their dependents. Further, those employers must send an annual statement to all employees eligible for coverage describing the health and dental insurance available to them. The Internal Revenue Service (IRS) created Form 1095-C to serve as that statement. For complete information refer to your tax professional or Form 1095-C instructions: https://www.irs.gov/pub/irs-prior/i109495c--2015.pdf.

For the 1095-C, you will need: https://www.irs.gov/uac/About-Form-1095-C:

Who is a full-time employee for each month.
Identifying information for employer and employee such as name and address.
Information about the health and dental insurance plan offered by month, if any.
The employee’s share of the monthly premium for lowest-cost self-only minimum value coverage.
Number of months the employee was enrolled in your coverage.
Number of months the employer met an affordability safe harbor with respect to an employee and whether other relief applies for an employee for a month.
If the employer offers a self-insured health or dental plan, information about the covered individuals enrolled in the plan, by month.

For the authoritative transmittal 1094-C you will need: https://www.irs.gov/pub/irs-prior/f1094c--2015.pdf

• Identifying information for your organization.

• Information about whether you offered coverage to 70% of your full-time employees and their dependents in 2015. (After 2015 this threshold changes to 95%.)

• Total number of Forms 1095-C you issued to employees.

• Information about members of the aggregated applicable large employer group, if any.

• Full-time employee counts by month.

• Total employee counts by month.

• Whether you are eligible for certain transition relief.

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on the Employee’s W-2 in Box 12, Code DD. All employers that provide "applicable employer-sponsored coverage" under a group health plan are subject to the reporting requirement.

In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee. See the chart, below, and the IRS questions and answers for more information:

An employer is not required to issue a Form W-2 solely to report the value of the health care coverage for retirees or other employees or former employees to whom the employer would not otherwise provide a Form W-2.

The chart below illustrates the types of coverage that employers must report on the Form W-2. Certain items are listed as "optional" based on transition relief provided by Notice 2012-9 (restating and clarifying Notice 2011-28). Future guidance may revise reporting requirements but will not be applicable until the tax year beginning at least six months after the date of issuance of such guidance.

Form W-2 Reporting of Employer-Sponsored Health Coverage

For more information: https://www.irs.gov/affordable-care-act/employers/employer-shared-responsibility-provisions

We understand that this area of health care reform is complex. If you would like professional assistance, there is always local help available at https://www.coveredca.com/find-help/.

Resources you’ll find there are certified insurance agents, local events and links to the County Services Agencies.

http://irs.treasury.gov/rpo/rpo.jsf Use this tool to research tax return preparers near you or to determine the type of credentials or qualifications held by a specific tax professional. All tax return preparers are not in this directory. This directory contains only those with a PTIN who hold a professional credential or have obtained an Annual Filing Season Program Record of Completion from the IRS.

Individuals who prepare federal or state tax returns in California must complete required education, maintain a $5,000 tax preparer bond, and register with the California Tax Education Council (CTEC). https://www.ctec.org/Payer/FindVerifyPreparer/

Applicable large employers can find complete list of resources and the latest news at the IRS Applicable Large Employer Information Center: https://www.irs.gov/Affordable-Care-Act/Employers/ACA-Information-Center-for-Applicable-Large-Employers-ALEs

Employers of less than 50 full-time employees (including full-time equivalents) can find more information from the IRS here: https://www.irs.gov/Affordable-Care-Act/Employers/Affordable-Care-Act-Tax-Provisions-for-Small-Employers