Feb 05, 2019
LISI recently fielded two compliance questions on the employer mandate:
Q.We have a group that’s no longer over 50 FTEs. Does the employer have to notify the insurance carrier to send the 1095-B form to employees?
A. The carrier must send the 1095-B form to all groups regardless of their Applicable Large Employer (ALE) status. The employer does not have to notify the carrier to send the form.
Q. When you have an ALE with a fully insured plan, who sends the 1095-C form to employees — the carrier or the employer?
A. ALEs must send the 1095-C form to all enrolled employees. The following explains which entities are required to send which forms:
- Form 1095-B, Health Coverage: Health insurance providers (i.e. health insurance companies) send this form to individuals they cover, with information about who was covered and when.
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage: Certain employers send this form to certain employees, with information about what coverage the employer offered. Employers that offer health coverage, referred to as “self-insured coverage,” send this form to individuals they cover, with information about who was covered and when.
- Form 1095-A, Health Insurance Marketplace Statement: The Health Insurance Marketplace (Marketplace) sends this form to individuals who enrolled in coverage there, with information about the coverage, who was covered, and when.
It's helpful to review what constitutes an ALE: An employer is considered an ALE based on average full-time equivalents (FTEs) in the previous calendar year. It doesn’t matter whether the employer exceeded 50 FTEs in any given month during the current year, but whether the employer averaged 50 or more FTEs over all 12 months of the previous calendar year. In other words, if the employer (or group of employers) averaged less than 50 FTEs during 2016, the employer was not an applicable large employer for 2017 and was not required to offer coverage to avoid potential Section 4980H penalties. The IRS offers a helpful FAQ on required forms. We also answered a recent question on an inactive business and the employee mandate.
For more information, contact your LISI Regional Sales Manager.
