The ACA requires three new types of information reporting to the IRS and to individuals about certain types of coverage. And similar to the Form W-2 reporting, one copy will be filed with the IRS and another copy will be provided to the individual. And, also, in accordance with the normal, current cycle of information reporting, the copies sent to the individuals will be sent by January 31st of the year following the coverage. The first type of information reporting is the Form 1095-A, which is the Health Insurance Marketplace Statement. This is very important to know about in open enrollment periods.
What is Form 1095-A and Minimum Essential Coverage?
It’s primarily used for individuals who get coverage through the Marketplace to help determine what their premium tax credit is. This will have information about the coverage through the Marketplace and all the individuals who were covered through the Marketplace, including any advanced payments that they received. And so this is, primarily, to help reconcile and claim the premium tax credit.
What is on Form 1095-A?
There are two other types of information reporting that will be required beginning in 2015. So, the 1095-A will be issued this year, or early 2015, for 2014. These other two types of information reporting are delayed one year, and so they will be issued in 2016 for the 2015 tax year, but I wanted to mention them because, first, the Form 1095-B is the one that’s really most relevant to the individual shared responsibility provision.
That type of reporting, the health coverage reporting, will be issued by any entity that provides Minimum Essential Coverage. So, that would be an insurance company or a government program, like Medicaid or Medicare.
What is IRS Form 1095-B?
The 1095-B will inform the IRS and the individual of the months that the individual was covered under Minimum Essential Coverage. This reporting is required under Section 6055 of the code, which was a new ACA provision, and this one will really provide the most relevant information to show compliance with the individual shared responsibility provision. And then the last type of reporting I wanted to touch on was the 1095-C, which is the employer-provided health insurance offer and coverage. This reporting is required under Section 6056 of the code – again a new provision from the ACA – and this will be issued by employers who are deemed to be what are called “applicable large employers” under the employer shared responsibility provisions in Section 4980H of the code.
What is IRS Form 1095-C?
That information reporting, the 1095-C, is only going to be issued to employees of applicable large employers, so employees of smaller employers are not going to get this type of information return, but I wanted to go over those three because your clients may be receiving one or more of these information returns. But this year, for 2014 and 2015, they may only just receive the 1095- A if they were enrolled in the Marketplace coverage. The other two types of reporting are not effective until next year.