1094 C: Everything You Need to Know
1094-C is one of the IRS forms filed by employers (along with Form 1095-C).3 min read
1094-C is one of the IRS forms filed by employers (along with Form 1095-C). Any business owner with employees must submit these forms when they are required to offer employees health insurance coverage under Obamacare, also referred to as the Affordable Care Act. The 1095-C contains a wealth of information regarding health insurance. This form must be sent to the IRS and employees. The 1094-C form is sent directly to the IRS and no one else and is essentially a cover sheet with information about Form 1095-C. These two forms make it easier for the IRS to ensure that employees are receiving the right kind of health insurance coverage.
The Purpose of 1095-C
Under the Affordable Care Act, anyone who employs 50 or more people full-time must by law offer health insurance to their employees. Every year, Form 1095-C must be sent to every employee who is eligible to receive health insurance coverage. Within the form, employees will find information on the lowest-cost premium that they could have, what months out of the year that coverage is provided, and other pertinent details about the coverage they receive. Whether or not an employee actually receives the benefits of the health plan, every employer must send form 1095-C to each employee. As of the 2015 tax year, this practiced has been required by law.
The Basics of Form 1094-C
The Affordable Care Act provides information regarding what business owners must offer their employees regarding health coverage. Any employer obligated to offer health coverage is often called an ALE or an “applicable large employer”. According the ACA regulations, anyone who works 30 hours a week or more is consider a fulltime employee.
As stated above, the 1094-C form acts as a cover sheet for form 1095-C. On this form is where you would include employer information such as physical address, telephone number, employer identification numbers, contact person, how many people they employee, and how many 1095-C forms will be sent.
What Employers Need to Know About Filing
The 1095-C form must be send out to each employee every year no later than the end of January. The employee information has to be completed and submitted to the IRS by February if the forms are filed via mail and March if the forms are filed online. If you employ more than 250 people and therefore have 250 or more forms to submit, you must do that electronically.
Coverage that is offered will vary following the termination of someone’s employment. The small change must fulfill the purpose of following CODE 4980H and reporting. An ALE is usually required to offer MEC (minimum essential coverage) when talking about Code 4980H. This is offered to your employee’s dependents provided that the dependents were given the chance to either enroll in the health plan or decline the offer. Once an employee has been terminated, the ALE will not offer COBRA to any dependent of said employee who rejected the chance to enroll. If this is the case, the ALE must report that COBRA coverage was not offered once the employee was terminated. A dependent’s eligibility for premium tax credits can remain intact if “no offer” is reported on line 14 of Form 1095-C.
Completing and Filing Forms 1094-C and 1095-C for ACA Information Reporting Purposes
If you choose to use substitute forms you may, but those forms have to include all details required by both Forms 1094-C and 1095-C as well as fulfill all IRS requirements.
Two Annual Information-reporting Requirements by The Affordable Care Act
Every self-insured employer, health insurance issuer, government agent, and health coverage provider has to provide details on the individuals who receive MEC from them, according to Section 6055 of the International Revenue Code (IRC). Every large employer (the ALEs), who follow the Affordable Care Act’s pay or play mandate have to follow and report the terms and conditions of the health plan that is being afford to every full-time employee, according to Section 6056 of the IRC.
Need additional information related to the 1094 C form or other tax forms you may have to file to the IRS when operating an LLC? Don’t hesitate to post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.