It’s reporting season again for applicable employers who are working to comply with Affordable Care Act requirements. Forms 1095 and Forms 1094 play an important role in avoiding IRS penalties. This blog clarifies the purpose of each form and provides links to important, simplified training guides.
Here’s what you need to know: If you’re an employer with 50 or more full-time employees or full-time equivalent employees, you’re considered a large employer. Therefore, you’re required to offer health insurance coverage to all your full-time employees and report that offer under the Affordable Care Act (ACA). IRS Forms 1094 and 1095 are how you report this coverage to both your employees and the IRS.
IRS Forms 1094 and 1095 at a glance
It’s really a package deal. Form 1095 is the form that provides the information about the health insurance offered to and/or elected by each employee. You’ll send this form to both your employees and the IRS. Form 1094 is simply the cover sheet for your Forms 1095. This one only needs to be sent to the IRS.
There are different versions of Form 1095, such as 1095-A, 1095-B, and 1095-C. These letters determine who must file the forms based on the type of insurance offered.
- Form 1095-A is completed when insurance comes from the health insurance marketplace, otherwise called the exchange and is not the responsibility of the employer.
- Form 1095-B is used by third-party administrators or insurance carriers and is provided only to covered individuals. It may also be required for large employers who offer self-funded coverage to non-employees. View our quick reference guide to Form 1095-B here. To learn more about the reporting requirements for non-employees, check this out.
- Form 1095-C is filed by large employers who offer fully insured or self-funded coverage under the ACA. It’s important to note you must provide all full-time employees with a 1095-C tax form, even if they do not enroll in your offered coverage. View our quick reference guide to Form 1095-C here.
You will need to provide and file the proper Form 1095 based on the model above that meets your company’s specifics. It’s also important to note that Forms 1095-B/C need to be filed with the IRS and require a matching Form 1094. You can learn more about the specifics for filing 1094-B and 1095-B here and 1094-C and 1095-C here.