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Health Care Reform

IRS Announces More ICHRA Codes for 2020 Form 1095-C

On February 2, 2021, the IRS announced that it added two more codes that can be used when reporting offers of ICHRAs for 2020. These codes are:

  • 1T. Individual coverage HRA offered to employee and spouse (no dependents) with affordability determined using employee's primary residence location ZIP code.
  • 1U. Individual coverage HRA offered to employee and spouse (no dependents) using employee's primary employment site ZIP code affordability safe harbor.

These codes were previously reserved from Code Series 1 on Form 1095-C, line 14.

To determine affordability, the employee’s cost for the lowest cost self-only silver coverage in the rating area in which they live minus the employer’s ICHRA contribution must be no greater than 9.78% (for 2020, 9.83% in 2021) of the employee’s earnings. CMS maintains a list of lowest cost, self-only silver coverage plans, here.

If the state of residence or employment has its own exchange, then that exchange will have tools to help determine the affordability calculation.

Employers who must report on their ICHRA offers for ACA compliance purposes should be aware of this development.

IRS Announcement »

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