Compliance Briefing Center

Healthcare

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Informative Q&As for Forms 1095-B and 1095-C

Recently released IRS Q&As regarding employer filing requirements under section 6055 and 6056 of the Affordable Care Act (ACA), commonly known as 1094 and 1095 filings, provide additional information on codes to be used for COBRA participants and Health Reimbursement Arrangements (HRAs) sponsored by an Applicable Large Employer (ALE).

Recap of ACA Filing Requirements

For an outline of filing requirements, please see our Compliance Alert Update to the Affordable Care Act Reporting Requirements and Affordable Care Act Reporting Requirements.

Questions and Answers
Due to the breadth and complexity of each Q&A, we will reference the Q&A number, the question, and a brief explanation of the answer. However, for a full description, please reference the entire Q&A on the IRS website.

Q&A 17. How should an ALE report enrollment information for self-insured health plan coverage provided to an individual who was not an employee on any day of the calendar year, such as a non-employee COBRA beneficiary?

By entering 1G, “Offer of coverage for at least one month of the calendar year to an employee who was not a full-time employee for any month of the calendar year…” 

Q&A 22. How should an ALE complete Part II of Form 1095-C for a full-time employee who terminates employment during a calendar year and receives an offer of COBRA continuation coverage?

This COBRA scenario is not reported as an offer of coverage in Part II of Form 1095-C. If the former employee was a full-time employee for one or more months of the year before terminating employment, the ALE should use code 1H on line 14 for any month for which the employee was not offered COBRA continuation coverage. For those same months enter 2A on line 16.

Q&A 23. How should an ALE complete Part II of Form 1095-C for an active employee who receives an offer of COBRA continuation coverage due to a reduction in hours?

The employer should report the offer of COBRA continuation as an offer of coverage in Part II of Form 1095-C. 

Q&A 24. How should an employer that sponsors a self-insured health plan report coverage of spouses and dependents of employees who separately elect to receive COBRA continuation coverage?

In some circumstances an employer may choose to report coverage of each non-employee spouse and dependent who separately elects COBRA continuation coverage on a Form 1095-B or on 1095-C.

Q&A 26. Should an ALE report coverage under a Health Reimbursement Arrangement (HRA) for an individual who is enrolled in both the HRA and the employer’s other self-insured major medical group health plan?

If an individual is covered by two or more plans that are minimum essential coverage and provided by the same reporting entity, reporting is required for only one of them for that month.

Q&A 27. Should an ALE report coverage under an HRA for an individual who is eligible for the HRA because the individual is enrolled in the employer’s group health plan?

An ALE would be required to report HRA coverage for an employee who is enrolled in the HRA but not enrolled in another group health plan of the employer.

The Questions and Answers about Information Reporting by Employer on Form 1094-C and Form 1095-C is very informative and extensive. It not only covers questions on COBRA coverage and HRA participants, but includes “Basics of Employer Reporting” and “Reporting Offers of Coverage and other Enrollment information.”

Download a copy of this Alert.