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Form 1095-C: Questions Your Employees May Have

Form 1095-C: Questions Your Employees May Have

As your employees start to receive tax forms, your employees may have questions regarding Form 1095-C and what to do with it. Read on for reminders about the form and how employers can be prepared to field questions from their employees.

 

Refresher: What is the 1095-C?

The Affordable Care Act (ACA) 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 form is the government’s way of tracking this. 

While the W-2’s main purpose is to communicate pay information to the IRS, the 1095-C’s function is to communicate health insurance information. Similar to the W-2, employees will also need the 1095-C to file personal taxes. This year, the IRS extended the deadline to March 2, 2021.

 

What 1095-C Questions Can Employers Expect from Employees?

Employers should be prepared to answer the following questions from their employees regarding the 1095-C form:

  1. When will I receive my 1095-C form? Employees will receive their 1095-C on or before March 2, 2021. On Oct. 2, 2020, the IRS issued Notice 2020-76, which extended ACA reporting deadlines and requirements for Forms 1095-B and 1095-C. The furnishing deadline has been moved to March 2, 2021. The typical 30-day extension to furnish information statements will not be granted in addition to the new deadline. 
  2. How will I receive my 1095-C form? Employers will mail (or hand deliver, if you’re not working remotely) these forms to employees or send them electronically if they have consented to electronic delivery.
  3. Do I need to wait for my 1095-C form to file my income tax return? According to the IRS, although information from Form 1095-C can help employees in determining eligibility for the premium tax credit, it is not necessary to have the form to file their return. You’ll need the form if you received a tax credit or are going to take a tax credit on your return or if you had a gap in coverage of more than three consecutive months. If these do not apply to you, you will just need to check a box indicating you were offered coverage and keep your 1095-C for your own records.
  4. What should I do with the 1095-C form? In short, employees don’t need to do much with this form. Since the issuers of the forms send the information to the IRS separately, employees should keep the forms for their records. 
  5. I’ve heard that some people receive Forms 1095-A and 1095-B. What are those? 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.
  6. Why did I get more than one 1095-C? If you had coverage from more than one provider, worked for more than one employer who offered coverage, or changed coverage or employers, you might receive more than one form. Another reason is if your family members receive coverage from different providers, according to the IRS.
  7. Who receives a 1095-C? Certain employees of Applicable Large Employers, which are employers with more than 50 full-time employees, receive these forms.
  8. What information is on form 1095-C? Form 1095-C includes information about the health insurance coverage that an individual’s employer offered and whether or not the employee enrolled in that coverage. 
  9. Where can I learn more about the 1095-C? Individuals can learn more about the 1095-C by visiting the IRS website.

Intro to Forms 1094-C and 1095-C BernieU Course blog Call to Action

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