What’s a 1095-C? How to answer employees’ tax season questions.
It’s that time again – tax season. For employers, the first quarter of the year brings about more reporting, filing, calculations, and more often than not, questions from employees about their tax requirements and paperwork.
While the Affordable Care Act’s (ACA) individual mandate was repealed as part of the GOP tax bill, the employer mandate is still in place. This means tax season will again require employers to report on their health care plans, starting with the distribution of the ever-confusing 1095-C to employees.
The good news is that the IRS recently extended the deadline to employers to provide 1095-Cs, from Jan. 31 to March 2, but the deadline for electronic filing has not been extended and remains April 2.
With ongoing ACA reform efforts and shifting deadlines, employees may have even more questions this year when it comes to reporting.
Here are some common questions to anticipate from employees about the 1095-C and how you can answer them.
- What is a 1095-C?
The 1095-C is the form that shows whether and when an employer provided or offered health care insurance at an affordable rate. It’s distributed each year by applicable large employers (ALEs) to all employees who qualify as full-time per the ACA, and it’s also shared with the IRS.
Form 1095-C allows the government to keep track of who’s following the rules set by the ACA. The form includes basic information, like an employee’s address and social security number, and information on the health coverage offered by the employer. In some cases, it indicates whether the employee enrolled in the offered coverage.
- Am I supposed to get a 1095-C?
All ACA full-time employees (those who average 30 hours of service a week) working for an ALE should get a 1095-C, regardless of whether or not they were enrolled in employer-sponsored health care. Even if you were only ACA full-time for a single month, you should still receive a form.
Part-time employees will only receive the 1095-C form if they were offered and enrolled in an employer-sponsored self-funded health care plan. While coverage for part-time employees is not mandatory under the ACA, if you’re on a company’s self-funded health care plan, you should receive a 1095-C or 1095-B.
Two things to note: Employees who worked full-time for more than one ALE in the last year might get more than one 1095-C – one from each ALE. Your spouse and/or dependents covered by your employer sponsored plan will not get a 1095-C.
- When will I receive my 1095-C?
Like last year, the 1095-C delivery deadline was extended. Employers are required to distribute the forms by March 2, pushed back from the original Jan. 31 deadline. If you don’t receive the form by this date but believe you should get one, you should contact your employer immediately.
- Do I have to wait for my 1095-C to file my taxes?
No. Your 1095-C is not required for completing your tax returns, so you don’t have to wait for it to file.
- So then what do I do with my 1095-C?
In most cases, no action is required. Check the form for simple mistakes, like an outdated home address, find out if you qualify for a subsidy (if on company health care, this probably isn’t the case), and file it away in a safe place with your other tax forms.
- What should I do if I notice a mistake?
If there are errors on your 1095-C, call the contact number listed on the form and someone will be able to help you correct it.
- I also got a 1095-B. Is that right?
Yes—you should get a 1095-B if you work for a fully insured or self-funded company.
Fully insured companies get their health plan through an insurance provider and pay the provider a premium. If your company is fully insured, the 1095-C will come from your employer, and the 1095-B from your insurance company. The forms should include the same information from slightly different perspectives.
Self-funded, or self-insured, companies operate their own health plan, and are responsible for providing the 1095-B or 1095-C form (with part three completed) to their employees.
It’s only the third year of ACA reporting, so both employees and employers will have questions about forms and requirements. And recent changes to the ACA and shifting deadlines will likely add another level of confusion over the next few months. Deadlines are quickly approaching—find the information and answers you need now to ensure a smooth reporting season.