Form 1095-C is an important document that employers use to report information regarding the healthcare coverage they offer to their employees. This form is primarily used to determine whether an individual is eligible for the premium tax credit on their tax return, and it also helps the IRS ensure compliance with the Affordable Care Act (ACA). Here is some relevant content for understanding who should complete Form 1095-C:
1. Employers subject to ACA requirements: The main responsibility for completing Form 1095-C lies with applicable large employers (ALEs). ALEs are generally those with 50 or more full-time employees or the equivalent in part-time employees. These employers must offer affordable health insurance that provides minimum essential coverage to their full-time employees and report details of the coverage on Form 1095-C.
2. Full-time employees: ALEs must complete Form 1095-C for each of their full-time employees, regardless of whether the employee enrolled in the employer-sponsored healthcare plan or not. Full-time employees are those who work an average of 30 or more hours per week, or 130 hours or more per month.
3. Part-time employees and seasonal employees: ALEs must also complete Form 1095-C for employees who are not considered full-time but meet certain conditions. For instance, part-time employees who averaged 30 or more hours per week over a certain period, or seasonal employees who worked for the employer during the seasonal period, may need to be included on the form.
4. Self-insured employers: Form 1095-C is not only for employers who offer health insurance through an insurance provider; self-insured employers must also complete this form. Self-insured employers are those who assume the financial risk and provide health coverage directly to their employees, instead of purchasing it from an insurance company.
5. Third-party administrators and multiemployer plans: In some cases where an employer has hired a third-party administrator to handle benefits administration or where an employer participates in a multiemployer plan, the responsibility for completing Form 1095-C may be shared or delegated. It is important to understand the specific rules and guidelines applicable in each scenario.
6. Deadlines and penalties: ALEs must provide a copy of Form 1095-C to their employees by January 31 of the following year, and they must also file the form with the IRS by the corresponding deadline. Failure to file or furnish the form correctly and on time may result in penalties imposed by the IRS.
Completing Form 1095-C accurately and on time is crucial for both employers and employees. Employers should consult with tax professionals or use dedicated software to ensure compliance with all requirements and avoid penalties. Employees should retain their copy of Form 1095-C for their records and use it when filing their tax returns.