Aug 24, 2020
In July 2020, the IRS announced an early draft of tax forms for 1094-C and 1095-C ACA filings. While not ready for use, employers should note a few updates to 1095-Cs and prepare for potential changes to 1094-Cs. However, most employers with fully-insured plans would not be affected by the changes. Applicable Large Employers who offer coverage to California residents through a self-insured plan in 2020 are required to submit reporting to the Franchise Tax Board (FTB) on March 31, 2021. Employers who offer only fully-insured plans are note required to submit reporting to the FTB as long as their insurer provides healthcare coverage information to employees enrolled in the plan, which insurers are required to do.
Although Form1094-C has no changes, the IRS updated the 1095-C draft to include eight new codes (1L through 1S) for individual coverage HRAs (ICHRAs). The new 1095-C codes must be used by employers to show how they determined the affordability of their ICHRA plan. SHRM says that employers may need to alter existing reporting systems. Three other changes were made as well:
- Form 1095-C is now two pages
- The form must include an employee’s age as of January 1, 2020 and their ZIP Code
- New state filings will be introduced in Rhode Island, Vermont and California (2020 Publication Form 3895-C) with additional guidance for self-insured plans.
Employers must meet these reporting deadlines:
- January 31, 2021 – Deliver 1095-C forms to employees
- February 28, 2021 – Paper filing with the IRS
- March 31, 2021 – Electronic filing with IRS
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