The Internal Revenue Service is trying to clear up an Affordable Care Act coverage reporting mystery: Which employers will continue to report health coverage offers on Form 1095-C, and which, if any, will use Form 1095-B?

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The IRS now says it wants employers with fully insured group health plans to continue to use the 1095-C.

A large employer that sponsors its own self-insured health plan may also end up using the 1095-C.

A small employer with a self-insured health plan could end up using the 1095-B. The 1095-B is the same form that health insurers use to report on the coverage they provide. This rule would apply to self-insured employers that are too small to have to comply with the ACA employer “shared responsibility” requirements, or employer coverage mandate system.

An ACA public health insurance exchange would continue to report individual exchange plan coverage on Form 1095-A.

IRS officials talk about their health coverage reporting ideas in a set of draft 1095-B instructions for the 2016 coverage year. 

IRS officials could change the instructions. If the IRS keeps the instructions as is, insurers and small employers would begin sending the 2016 1095-B’s to enrollees in early 2017. 

The IRS is hoping coverage providers will get 1095-B’s to each “responsible individual,” or primary insured, by Jan. 31, 2017. The proposed deadline for filing 2016 1095-B’s with the IRS is Feb. 28, 2017, for paper filers and March 31, 2017, for electronic filers.

A coverage provider must bundle the 1095-B copies it’s sending the IRS together with a 1094-B cover sheet.

The IRS uses the 1094 and 1095 forms to run the ACA individual mandate program as well as the ACA employer mandate program.

The ACA now requires some employers to offer a minimum level of health coverage or face the possibility of having to pay penalties. The law also requires many people to own a minimum level of health coverage or face the possibility of having to pay the penalty.

The drafters of the law put the penalties in an effort to compensate health insurers for other rules that now prohibit insurers from using application rejections or high premium rates to protect themselves from enrollees with very high health costs, such as enrollees who know they will need liver transplants. The mandate penalties are supposed to balance out the very sick people who have gotten covered by pushing more healthy people to pay for coverage.

Individual taxpayers use 1095-A forms to apply for ACA exchange plan premium subsidies, see if they owe individual mandate penalties, and calculate any mandate penalties they may owe.

Related:

PPACA Form 1095-B: CMS to put off full Medicare compliance

Why the 1095-C PPACA form launch could make you money

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