Sorting the Puzzle: 1094/1095 Filing Details & New Form Issuance
Focusing on IRS forms 1094 and 1095, this content discusses the new form issuance in 2015, differences from previous forms, and challenges in completing the forms. The details cover ALE information, transmittal forms, and specific guidelines for governmental entities. Form completion tips and links to relevant instructions are also provided.
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Presentation Transcript
Sorting the Pieces of the Puzzle: 1094/1095 Filing Details Darcy L. Hitesman Hitesman & Wold, P.A.
New Forms Issued Draft 2015 Forms pre-released June 2015 Form 1094-C: http://www.irs.gov/pub/irs-dft/f1094c--dft.pdf Form 1095-C: http://www.irs.gov/pub/irs-dft/f1095c--dft.pdf Very little difference from 2014 Forms Addition of Plan Start Month on Form 1095-C No new instructions yet This presentation assumes no major changes to instructions either 2014 Instructions: http://www.irs.gov/pub/irs-dft/i109495c--dft.pdf
Overview & Comments Focus on the two forms Comprehensive but no exhaustive Not addressing: Deadlines and methods for filing Notification options and deadlines Penalties for failure to file Etc.
Overview & Comments You will not complete all lines! First challenge is determining what lines need completion Also tells you what information you will need Are you currently gathering? Recommend circle lines required to be completed Double check lines not circled Cross through lines not required to be completed DO THIS NOW. DO THIS NOW.
IRS Form 1094 IRS Form 1094- -C (2015) C (2015) http://www.irs.gov/pub/irs-dft/f1094c--dft.pdf
Form 1094-C Part I: ALE Information Form 1094-C is a transmittal form ALE Member Refers to single employer Refers to member of an Aggregated ALE Group Aggregated refers to controlled group for purposes of the Code Lines 7 and 8 identify the person responsible for answering any questions
Form 1094-C Part I: ALE Information Lines 9 15 are for governmental entities only DGE defined on p. 9 of 2014 instructions Example of DGE on p.2 of 2014 instructions Line 18, total number of 1095-C forms transmitted under this 1094-C Can be more than one transmittal
Form 1094-C Part II: ALE Member Information Line 19, Authoritative transmittal One must be designated authoritative and report aggregate employer-level data Lines 20 22 completed only if authoritative transmittal Line 20, total 1095-Cs for ALE member Compare to Line 18 Line 21, whether part of Aggregated ALE Group (i.e., controlled group) If not, do not have to complete Part IV Line 22, Certifications of Eligibility [later slide] Signature block Examined return and accompanying documents
Certifications of Eligibility The Four Boxes Form 1094-C, Part II, Line 22 Remember only completing if authoritative transmittal The Four Boxes Qualifying Offer Method Qualifying Offer Method Transition Relief Section 4980H Transition Relief 98% Offer method Employer determines whether apply and whether want to take advantage Check all that apply Boxes checked significantly impact what needs to be completed
Qualifying Offer Method 1094-C Part II, Line 22, Box A checked yes If eligible to use and using qualifying offer method (QOM) for one or more full-time employees Employer certification that made a qualifying offer (QO) to one or more full-time employees for all months during the calendar year in which employee was a full-time employee Not a month by month determination Code 1A in the all 12 months box
Qualifying Offer Method QO offer of MEC providing minimum value to full-time employee to which penalty could apply (excludes those in LNP) for all months of the year, at a cost not greater than 9.5% of FPL divided by 12, and offer includes employee, dependents, and spouse. Must not complete 1095-C, Part II, Line 15 for any month in which QO made Where 1095-C, Part II, Line 14 indicates QO by using code 1A Not required Do not check 1094-C, Part II, Line 22, Box A Instead complete 1095-C, Part II, Lines 14 and 15
Qualifying Offer Method Transition Relief 1094-C Part II, Line 22, Box B checked yes If eligible for and using qualifying offer method transitional relief (QOM-TR) for one or more full-time employees Employer certification that made a QO for one or more months of the calendar year 2015 to at least 95% of full-time employees For 2015, may be able to use 70% instead of 95% [later slide] QO offer of MEC providing minimum value to full-time employee to which penalty could apply (i.e., exclude LNP) for one or more months of the year, at a cost not greater than 9.5% of FPL divided by 12, and offer includes employee, dependents, and spouse.
Qualifying Offer Method Transition Relief 1095-C. Part II. Line 14, Code 1A for months employee received a QO 1095-C. Part II. Line 14, Code 1I for months employee did not receive a QO Must not complete 1095-C, Part II, Line 15 for any month in which QO made or QOM-TR applies Where 1095-C, Part II, Line 14 indicates 1A or 1I Not required Do not check 1094-C, Part II, Line 22, Box B Instead complete 1095-C, Part II, Lines 14 and 15
Section 4980H Transition Relief *This slide has been revised 1094-C Part II, Line 22, Box C checked yes Special penalty related rules ALEs with 50-99 employees If qualify, penalty assessable beginning 2016 ALE with 100 or more employees For 2015, minus 80 freebies instead of minus 30 freebies Must complete 1094-C, Part III, column (e)
98% Offer Method 1094-C Part II, Line 22, Box D checked yes If eligible for and using 98% offer method transitional relief (98%) for one or more full-time employees Employer certification that offered for all months of calendar year affordable health coverage (under one of the safe harbors) providing minimum value to at least 98% of its employees for whom filing a 1095-C, and offered MEC to employees dependents. Do not have to complete 1094-C, Part III, column (b) Not required Do not check 1094-C, Part II, Line 22, Box D Instead complete 1095-C, Part II, Lines 14 and 15 and Part III, column (b)
Form 1094-C Part III: ALE Member Info Monthly Column (a) Minimum Essential Coverage (MEC) Offer Indicator Check yes or no Where 1094-C Part II, Line 22, Box C checked yes ALE with 100 or more employees For 2015, minus 80 freebies instead of minus 30 freebies Check yes
Form 1094-C Part III: ALE Member Info Monthly Non-calendar plan year If qualify for transitional relief (see description on pp. 12, 13 of 2014 Instructions) Months prior to start of plan year can check yes if offer health coverage no later than first day of 2015 plan year Line 23 if all information the same for all 12 months Or lines 24 35 Complete month by month
Form 1094-C Part III: ALE Member Info Monthly Column (b) Full-time Employee Count If checked 1094-C, Line 22, Box D (98% Offer Method), do not complete Number of full-time employees for each calendar month minus full-time employees in a Limited Non-Assessment Period (LNP) NOT related to full-time employees that took coverage LNP Recognized period during which not penalty assessable How to code when a full-time employee is not offered coverage Examples include waiting period, first month of employment
Form 1094-C Part III: ALE Member Info Monthly Use same day each month First day of calendar month Last day of calendar month First day of first payroll period in month Last day of first payroll period in month If the same number for each calendar month, may use all 12 months instead of month by month
Form 1094-C Part III: ALE Member Info Monthly Column (c) Total Employee Count Total number of employees for each calendar month Full-time, part-time, seasonal, temporary, etc. NOT related to those that took coverage Use same day each month Same as column (b) If the same number for each calendar month, may use all 12 months instead of month by month
Form 1094-C Part III: ALE Member Info Monthly Column (d) Aggregated Group Indicator If checked yes on 1094-C, Part II, Line 21 Line 23 if all information the same for all 12 months Or lines 24 35 Complete month by month If check any box yes , must complete 1094-C, Part IV
Form 1094-C Part III: ALE Member Info Monthly Column (e) Section 4980H Transitional Relief Indicator If checked yes on 1094-C, Part II, Line 22, Box D Availability of relief is employer responsibility to determine Code A if qualify for and are requesting 50-99 relief (not penalty assessable in 2015) Code B if qualify for and are requesting 100 or more relief (penalty assessable but lower thresholds for 2015) Cannot be eligible for both
Form 1094-C Part IV: Other ALE Members of Aggregated ALE Group COMPLETE ONLY IF PART OF AGGREGATED ALE GROUP If checked yes on 1094-C, Part II, Line 21 Complete if part of aggregated ALE group at any time during calendar year List top 30 ALE members in descending order based on highest average full-time employees Must also complete 1094-C, Part III, column (d) LINKS to 2015 Instructions: Form 1094-c: http://www.irs.gov/pub/irs-dft/f1094c--dft.pdf Form 1095-c: http://www.irs.gov/pub/irs-dft/f1095c--dft.pdf
IRS Form 1095 IRS Form 1095- -C (2015) C (2015) http://www.irs.gov/pub/irs-dft/f1095c--dft.pdf
Form 1095-C Part I: Employee and ALE Members One for each full-time employee Full-time under Health Care Reform Regardless of whether actually covered Full-time employee for any month of the calendar year If self-insured, also for each other employee (i.e., other than full-time) actually covered Lines 7 13 need to match Form 1094-C entries
Form 1095-C Part II: Employee Offer and Coverage Offer Provides employee an effective opportunity to enroll in MEC health coverage (or decline that coverage) at least once each plan year Offer to employee and dependents; offer to spouse not required Plan start month New Optional for 2015 Will be a two digit code in 2015 Instructions when issued
Form 1095-C Part II: Employee Offer and Coverage Line 14: Offer of Coverage Look at the codes in instructions 1A if qualifying offer (MV and affordable under FPL safe harbor) Check the box on 1094-C, Line 22 First column if all 12 months Otherwise, each calendar month NOT related to who actually takes coverage
Form 1095-C Part II: Employee Offer and Coverage Line 14 Example: FT employee hired on June 15, 2015; coverage available first of month following 30 days employment; employee actually enrolled June July August December Compare to employee covered for entire year all boxes would be 1E so use all 12 months 1H for months prior to first coverage month 1E months offered
Form 1095-C Part II: Employee Offer and Coverage Line 15: Employee Share of Lowest Cost Monthly Premium, for Self-only Minimum Value Coverage Affordability NOT related to what employee actually takes Only complete if line 14 is 1B, 1C, 1D, or 1E Left blank if line 14 is 1A qualified offer Check the box on 1094-C, Line 22, Box A
Form 1095-C Part II: Employee Offer and Coverage Line 16: Applicable Section 4980H Safe Harbor Note: if applicable Code 2 series Safe harbor codes and other relief Addresses which to use when more than one applies If none apply, leave blank First column if all 12 months Otherwise month by month
Form 1095-C Part II: Employee Offer and Coverage Common examples include 2C if enrolled in coverage each day of the month Overrides any other applicable code 2D if in LNP 2A if not an employee for the month 2I if qualify for non-calendar transitional relief
Form 1095-C Part II: Employee Offer and Coverage Line 16 Example: FT employee hired on June 15, 2015; coverage available first of month following 30 days employment; employee actually enrolls Jan May June and July August Dec Compare to FT enrolled all year 2C 2A 2D 2C
Form 1095-C Part III: Covered Individuals ONLY IF SELF INSURED Check the box! Report covered individuals Not employees Persons covered through employee Dependents Spouse Domestic partner
Form 1095-C Part III: Covered Individuals Persons not covered through employee Retiree (beginning year after) Former employee on COBRA beginning year after Other non-employee (e.g., independent contractor) For persons not covered through employee, may use 1095-B or 1095-C If use 1095-C, Part II, Line 14 coded 1G for all 12 months
Form 1095-C Part III: Covered Individuals Social Security Number 2 attempts to collect after first unsuccessful attempt (e.g., open enrollment) Birth date alternative if attempts to collect fail If all months the same, all 12 months Otherwise, month by month
Summary & Closing Comments Do a preliminary run through the documents now Penalties assessed monthly so may be time to fix going forward Make sure you qualify for simplified reporting (4 boxes) and other relief Identify To Do items regarding tracking, documentation, etc. Person listed as contact Person that signs Keep all information used to complete forms Information actually reported Information that supports how reported Information in case a mistake was made
Thank You Hitesman & Wold, P.A. www.hitesmanlaw.com
