/FAQs
FAQs2018-12-16T22:23:57+00:00

We are dedicated to helping our clients navigate the complexity of ACA and employee eligibility reporting. Below you will find answers to many of the frequently asked questions about employer reporting requirements and what to expect from the Internal Revenue Service.

Which employers are subject to the ACA’s reporting requirements?2018-11-01T20:31:03+00:00

Generally, all “Applicable Large Employers (“ALE”) are subject to the reporting requirements. An ALE is defined as an employer with 50 or more Full-Time and/or Full-Time equivalent employees. Small employers (i.e. less than 50 employees) that self-insure their health benefits are also subject to the reporting requirements.

Which employees must receive a 1095-C Form?2018-11-01T20:31:25+00:00

A 1095-C form must be filed for each Full-Time employee who worked for at least one calendar month during a reporting year. A Full-Time employee is a common-law employee averaging at least 30 hours of service per week (or 130 hours per month). An employer is not required to prepare and file a 1095-C form for variable hour employees who were in an initial measurement period for all months of their employment during the relevant calendar year.

For self-insured health plans, a 1095 form must be filed for every employee who is covered (regardless of Full-Time or Not Full-Time status). This form will also indicate coverage months for the employee’s dependents and spouse. In addition, any other individuals who received coverage during the calendar year must also be reported.

How do I determine if an employee is Full-Time for ACA purposes?2018-11-01T20:31:44+00:00

For purposes of Forms 1094-C and 1095-C, the term “Full-Time employee” means a Full-Time employee as defined under section 4980H and the related IRS regulations. No other definition of “Full-Time” is applicable for ACA purposes. As per the regulations, a Full-Time employee is an employee who, for a calendar month, is determined to be a Full-Time employee under either the monthly measurement method or the look-back measurement method (as applicable to that employee). The monthly measurement method and the look-back measurement method are the two methods provided under the section 4980H regulations for determining whether an employee has performed sufficient hours of service to be considered a Full-Time employee.

Does a Full-Time employee who declines coverage receive a 1095-C form?2018-11-01T20:32:01+00:00

Yes, the form reports offers of coverage, not enrollments or waivers. All Full-Time employees (those who average 30 hours per week, 130 hours per month) must be reported on the 1095 form.

How is an employee with continuation COBRA coverage reported?2018-11-01T20:32:26+00:00

For purposes of Forms 1094-C and 1095-C, the term “Full-Time employee” means a Full-Time employee as defined under section 4980H and the related IRS regulations. No other definition of “Full-Time” is applicable for ACA purposes. As per the regulations, a Full-Time employee is an employee who, for a calendar month, is determined to be a Full-Time employee under either the monthly measurement method or the look-back measurement method (as applicable to that employee). The monthly measurement method and the look-back measurement method are the two methods provided under the section 4980H regulations for determining whether an employee has performed sufficient hours of service to be considered a Full-Time employee.

For line 14 of Form 1095-C, how are partial months of coverage due to termination of employment reported?2018-11-01T20:36:16+00:00

For ACA purposes, an employer is only considered to have offered coverage for a month if that coverage applied for every day of that month. However, an exception applies for terminated employees. If an employee terminated before the last day of a month, but the employee would have had coverage for the entire month if they had not terminated, the employer can consider that employee as having been offered coverage for the entire month.

When reporting the cost of coverage, what dollar amount is reported on Line 15 of the 1095-C form?2018-11-01T20:35:54+00:00

For Line 15 of the 1095-C form (which is completed only when Codes 1B, 1C, 1D or 1E are used on Line 14) only the monthly single-only premium amount is used for the base level plan meeting minimum value requirements as per IRS regulations. Therefore, if an employer offers a PPO, HMO and an HDHP plan and the HDHP plan is the base plan meeting minimum value requirements, the monthly premium for the HDHP plan should be entered on Line 15, regardless of whether the employee actually enrolled in that specific plan.

Is reporting required for employees who received their health benefits from a multiemployer plan and for whom payment was submitted to the plan?2018-11-01T20:34:00+00:00

Yes, under the Multiemployer Interim Rule Relief, code 2E should be reported for any month for which the multiemployer arrangement interim guidance applied for an employee. An employer does not need to report on the enrollments/waivers or affordability in this scenario.

What methods can I use to count hours of service?2018-11-01T20:34:32+00:00

IRS regulations define an hour of service to mean each hour for which an employee was paid, or entitled to payment, for the performance of duties for their employer, and each hour for which an employee was paid, or entitled to payment by an employer for a period of time during which no duties were performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence (as defined in 29 CFR 2530.200b–2(a)). For employees paid on an hourly basis, an employer is required to calculate actual hours of service from records of hours worked and hours for which payment was made or was due. For employees paid on a non-hourly basis (such as salaried employees), an employer may calculate the actual hours of service using the same method used for hourly employees, or an employer may use a days-worked equivalency crediting the employee with eight hours of service for each day that an employee would have been required to be credited with at least one hour of service, or a weeks-worked equivalency whereby an employee is credited with 40 hours of service for each week during which an employee would have been required to have been credited with at least one hour of service. It should be noted that IRS regulations prohibit use of these equivalencies in circumstances in which their use would result in a substantial understatement of an employee’s hours of service in a manner that would cause that employee not to have been treated as a Full-Time employee.

What is a Seasonal Employee for ACA purposes?2018-11-01T20:34:54+00:00

For ACA purposes, a seasonal employee refers to an employee in a position for which their customary annual employment will be six months or less. In this context, “customary” means that by the nature of the position, an employee typically works for a period of six months or less, and that period should begin each calendar year during approximately the same time of the year, such as summer or winter. In certain instances, an employee can still be considered a seasonal employee even if the seasonal employment is extended in a particular year beyond its customary duration (regardless of whether the customary duration is six months or is less than six months). For example, if snow plow operators have a customary annual employment period of six months, but are asked in a particular year to work an additional month because of an unusually heavy snow season, they would still be considered seasonal employees.

Are all employers required to e-File with the IRS?2018-11-02T17:03:59+00:00

If an employer is going to file 250 or more forms, that employer must file electronically. The 250-or-more requirement applies separately to each type of form filed and also applies separately for original and corrected returns. For example, if an employer is going to file 500 1095-B forms and 100 1095-C forms, that employer must file their 1095-B forms electronically, but they are not required to file their 1095-C forms electronically. If an employer has 150 1095-C forms to correct, that employer may file their corrected returns on paper since they fall under the 250 threshold. However, if the employer has 300 1095-C forms to correct, those forms must be filed electronically. It should be noted that the IRS encourages all employers to file electronically regardless of their total number of forms.