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Common Questions Your Employees Have on 1095-Cs

Common Questions Your Employees Have on 1095-Cs

1094/1095-Cs can be confusing for even the most seasoned HR pros, so imagine how difficult they are to navigate for your employees. Don't leave your employees in the dark, here's how to answer their burning 1095-C questions.

What is a 1095-C?

If an employee asks what a 1095-C is, you can tell them the following:

The Affordable Care Act requires employers with 50 or more full-time equivalent employees to offer healthcare coverage to full-time employees or potentially face a fine. The 1095-C is the government’s way of tracking this. Similar to the W-2, your 1095-C will be used to file your taxes and communicate your health insurance information.

When will I get the 1095-C?

If an employee asks when they will receive their 1095-C form, you can let them know they’ll receive the 1095-C for the 2019 tax year on or before March 2, 2020.

What do I need to do with the 1095-C?

If an employee wants to know what they need to do with the form you can explain that similar to the W-2, you will use the form to complete your tax return by transferring data from the 1095-C form to your tax return. You should keep the 1095-C with the other forms you use to file your tax return.

I’ve also heard of people receiving 1095-A and 1095-B, what are those?

If an employee has questions on 1095-A and B forms, you can let them know that 1095-As are distributed to people who received insurance through a federal or state marketplace. 1095-Bs are distributed to people who received insurance through small self-funded groups, employers who use the Small Business Health Options Program or fully-insured employer sponsored plans.

How will the 1095-C affect my taxes?

If an employee wants to know how these forms affects their taxes, you can tell them that they will need the 1095-A to complete form 8962 to reconcile any advance payments of the premium tax credit or claim the premium tax credit, and to file a complete and accurate tax return. Information from the 1095-C can assist them in determining eligibility for the premium tax credit, but it is not necessary to have form 1095-C to file their return.

What if I had gaps in coverage?

If an employee has questions around their gaps in coverage, you can educate them around penalties by sharing the following information:

Beginning in 2019, the federal penalty for failing to carry comprehensive coverage in the previous tax year is $0. However, some states have implemented their own penalties.

  • Massachusetts: the penalty is calculated at 50% of the cost of the lowest-cost plan that could have been purchased. There is no penalty if your income is up to 150% of the poverty level.
  • New Jersey: the maximum penalty will be based on the average cost of a bronze plan in New Jersey.
  • DC: the maximum penalty will be based on the average cost of a bronze plan in DC.
  • Vermont: Vermont’s individual mandate won’t take effect until 2020 and the details of the penalty have not yet been formalized.
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Please note, this blog post is meant to be informational but is not intended to serve as legal advice.

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