Applicable Large Employers or ALEs (with 50 or more full-time and full-time equivalent employees) are required to file information with the Internal Revenue Service (IRS) to demonstrate what benefits the employer offered to its employees the previous calendar year. Termed as 1094/1095, these forms will be used by IRS to determine whether an employer will be penalized for noncompliance and also determine employees’ eligibility for the premium tax credit. Employers that do not submit an annual IRS return or provide individual statements to all full-time employees may be subject to a penalty up to $280 per return, with a maximum annual penalty of $3,392,000 million.
Difference between 1094 and 1095 Forms
Form 1094 is a transmittal form that acts as a “cover sheet” for all of the Forms 1095 that you are required to send to the IRS. Form 1095 is designed to provide the IRS with information about the health insurance coverage offered to each of your full-time eligible employees, and to help determine whether any of your employees are eligible for premium tax credits. Unlike Form 1094 that is sent only to the IRS, you must send completed Forms 1095 to both the IRS as well as each of your full-time employees.
There are different versions of Form 1095, such as 1095-A, 1095-B, and 1095-C. These letters determine who must file the forms based on the type of insurance offered.
- Form 1095-A, Health Insurance Marketplace Statement. The Health Insurance Marketplace sends this form to individuals who enrolled in coverage there.
- Form 1095-B, Health Coverage. Health insurance providers and Third-party administrators (TPAs) send this form to individuals they cover.
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. This form is filed by large employers who offer fully insured or self-funded coverage under the ACA. It’s important to note you must provide all full-time employees with a 1095-C tax form, even if they do not enroll in your offered coverage
1094 / 1095 Reporting Made Easier
The procedure of filing to IRS as well as notifying employees of their benefits, affordability, and eligibility is a cumbersome task and requires a great deal of responsibility. We, at Davidow Financial & Insurance Services, Inc., streamline the process and relieve you of your administrative overhead. Our team of ACA specialists can handle any/all of the following tasks:
- Determination of which forms need to be completed, for whom, and applicable deadlines
- Delivery of an instruction kit and corresponding template for 1094/1095 form completion
- Collection, structuring, and coding of all required data
- Entry of all data into 1094/1095 forms
- Output, IRS filing, and distribution of forms 1094/1095
- Review of errors including coding, social security numbers, and other data errors
- Assistance with distribution and filing of forms
Contact us to meet our experts and learn know more about our ACA reporting services.