IRS Releases Final Instructions for Forms 1094-C, 1095-C, 1094-B and 1095-B
The IRS recently released final Forms 1094 and 1095 (B and C) and instructions related to IRC Sections 6055 and 6056 reporting. The 2018 forms and instructions appear to have no substantial changes from the 2017 versions.
As a reminder, Forms 1094-B and 1095-B (the forms used for Section 6055 reporting) are required of insurers and small self-insured employers that provide MEC. These reports will help the IRS administer and enforce the ACA’s individual mandate for 2018. Form 1095-B, the form distributed to the covered employee, will identify the employee, any covered family members, the group health plan and the months in 2018 for which the employee and family members had MEC under the employer's plan. If the plan is fully insured, Form 1094-B identifies the insurer (for a fully insured plan) or the employer (for a self-insured plan) and is used by the insurer to transmit corresponding Forms 1095-B to the IRS.
In addition, the ACA requires all employers with 50 or more full-time equivalent employees to file Forms 1094-C and 1095-C with the IRS and to provide statements to employees to comply with IRC Section 6056 (intended to help the IRS enforce the ACA’s employer mandate). Specifically, large fully insured employers will need to complete and submit Forms 1094-C and 1095-C (Parts I and II). Large self-insured employers, which are subject to both Sections 6055 and 6056, may combine reporting obligations by using Form 1094-C and completing all sections of Form 1095-C (Parts I, II and III). Small self-insured employers would need to file Forms 1094-B and 1095-B. In addition, employers with grandfathered plans must comply with the reporting requirements.
The 2018 final forms and instructions appear to have only minor changes compared to the 2017 forms. Highlights of the changes are as follows:
- 1094-B – Appears unchanged.
- 1094-C – Appears unchanged.
- 1095-B – Appears unchanged.
- 1095-C – Line 1 in Part I and Column (a) in Part III provide dividers for the entry of the individual’s first name, middle initial and last name. This new layout will likely ensure all Forms 1095-C are completed with an identical name structure, thus leading to more uniformity and fewer TIN issues.
- Instructions – Penalty amounts for reporting failures reflect indexed increases. The penalties for failure to comply have increased from $260 to $270 per failure. This means that an employer who fails to file a completed form with the IRS and distribute a form to an employee/individual would be at risk for a $540 penalty. Notably, however, the instructions don’t refer to proposed regulations that we reported about in the June 12 edition of Compliance Corner that would require aggregation of most information returns when determining the 250-return threshold for mandatory electronic filing.
Lastly, the due dates for 2018 employer reporting are:
- Jan. 31, 2019 to provide 2018 information returns to employees or responsible individuals.
- Feb. 28, 2019 for paper filings with the IRS of all 2018 Forms 1095-C or 1095-B, along with transmittal Form 1094-C or 1094-B. Employers filing fewer than 250 forms may file either by paper or electronically.
- April 1, 2019 for electronic filings with the IRS of all 2019 Forms 1095-C or 1095-B, along with transmittal Form 1094-C or 1094-B. Employers filing 250 or more forms are required to file electronically with the IRS.
Employers should become familiar with these forms in preparation for filing information returns for the 2018 calendar year. In addition, despite the repeal of the individual mandate penalty in 2019, large employers will still need to continue to offer affordable, minimum value coverage to all full-time employees and prepare to comply with employer reporting requirements as to 2018 coverage.
Form 1094-B »
Form 1095-B »
Form 1094-C »
Form 1095-C »
B Form Instructions »
C Form Instructions »
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