Getting the first batch of Form 1095-C employer health coverage notices out to the enrollees, former enrollees and Internal Revenue Service was possible, but it wasn’t much fun.
Jeana Parker, vice president of strategic initiatives at Orlando, Florida-based PlanSource Benefits Administration Inc., talked about the challenges involved with sending out the 2015 wave of 1095-C notices today in an interview.
PlanSource is a major employee benefits and human resources support services company.
The Affordable Care Act now requires employers to send out notices showing whether they offer employees health coverage. Employees with group health coverage can use the notices to prove that they have minimum essential coverage and need not pay the penalty that the law imposes on many people who lack what the government defines as enough health coverage.
Employees without group health coverage can use their 1095-C forms to show that they are eligible to apply for ACA public exchange plan premium subsidies.
An affected employer is supposed to get a 1095-C coverage notice out to each worker and former worker after the end of the year. An employer is also supposed to send a 1095-C summary sheet, Form 1094-C, to the Internal Revenue Service.
Parker oversaw the PlanSource effort to help 723 clients measure 750,979 workers’ hours, produce 459,342 1095-C forms, and transmit 446,602 1095-C forms to the IRS.
The IRS has told employers it will give them extra time to get the second wave of 1095-C forms, for calendar year 2016, to employees and former employees.
Related: IRS postpones ACA reporting deadline
But Parker said her team is preparing to send out most of the notices on the original schedule, even though it’s not clear how the next presidential administration will handle the ACA coverage reporting requirements.
Last year, employers struggled to get their forms out, Parker said.
“This year,” she said, “it will obviously be much smoother.”
For more about what Parker saw last year, when she grappled with the 1095-C requirements for the first time, read on:
Parker says creating 1095-C’s out is worse than doing W-2′s. (Image: IRS)
1. Getting 1095-Cs out is hard
A 1095-C looks much like the Form W-2 that employers use to report workers’ wages and payroll tax totals.
But the 1095-C compliance burden is different, Parker said.
“I believe it’s much great than the W-2 burden,” she said.
Most employers can get most W-2 information from the payroll system, but creating a 1095-C involves combining data from payroll systems, benefits systems and other systems that may not fit together very well, Parker said.