Should Auld Acquaintance Be Forgot…Not If They Relate to the Affordable Care Act Reporting Requirements

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by Becky Achten

Should auld acquaintance be forgot…not if they relate to the Affordable Care Act reporting requirements. In the midst of the flurry of health and welfare changes coming from the Consolidated Appropriations Act, employers can’t forget about the “auld” Affordable Care Act. Since the 2015 tax year, large employers of self-insured health plans have been required to report to employees and the IRS information regarding the health insurance offered. Form 1095-C is used to report this information to employees. There have been a few changes to the Form 1095-C for the 2020 tax year that employers should keep in mind:

  • The due date for employer to provide the Form 1095-C to individuals has once again been extended from 1/1/2021 to 3/2/2021.
  • The multiemployer interim guidance is still applicable for 2020. This means that for any employee where Code 2E can be used on Line 16 (the employer is required to contribute to a multiemployer plan), Code 1H can be reported on Line 14 regardless of whether the employee was eligible to enroll or did enroll in coverage under the multiemployer plan.
  • NEW. You must enter the Plan Start Month on the first line of Part II. This is the earliest month in which the plan year begins for which coverage is offered to the employee, or would have been offered if the employee had been eligible. For most calendar year plans, this will be 01.
  • NEW. Special codes have been added for reporting offers of an Individual Coverage HRA (ICHRA) and additional information is required:
    • Employees Age on January 1 on first line of Part II
    • Codes 1L through 1S for Line 14 are applicable only to Individual HRA Coverage
    • Zip Code on Line 17

      In addition, the IRS announced a post-release addition to the codes included in the 2020 Form 1095-C instructions. The instructions included codes for only three ICHRA coverage possibilities. Two additional codes were added to correct the omission for coverage of an ICHRA offered to the employee and spouse, but no dependents. Code 1T indicates affordability was determined using the zip code of the employee’s primary resident for an ICHRA; Code 1U indicates affordability was determined using the zip code of the employee’s primary employment site.

The days of auld lang syne aren’t over…and there’s still a few weeks to get correct Forms 1095-C delivered to employees.