1095-C — those are some letters and numbers your finance staffers will get very familiar with in coming months.
After all, you’ll need to get one of these forms in every full-time equivalent (FTE) employee’s hands by Feb. 1, 2016. Following that, the transmittal form, the 1094-C, will have to be IRS-bound by Feb. 29.
No doubt your company has already been tracking healthcare cost data in preparation for the first-time reporting due date. But there’s no rest for the weary: IRS has been cranking out additional guidance to make sure all employers understand what’s in and out-of-bounds in the requirements.
Take a look at the latest guidance from the Taxman to make sure your compliance is on track.
Compliance Task #1: Delivering the 1095-C to employees
If your company has its W-2 process down, you can be pretty confident you’ll be able to handle the 1095-C. IRS says the process is much the same.
As far as delivery options, your company can distribute the forms by hand or via mail (ideally the last-known permanent address, or if that’s unknown, the employee’s temporary address).
Prefer to distribute the 1095-C electronically? That’s OK too, according to the Taxman, but you must meet several criteria:
- You must meet hardware and software requirements, and
- You must ask employees in advance and receive their consent.
There is, however, one place where the 1095-C process differs from the W-2 drill: when an employee terminates his or her employment with you.
The folks at Keep Up to Date on Payroll break it down for you:
With Forms W-2, if a former employee gives you a written request for the statement mid-year, you have 30 days to furnish it.
You have no such requirement with Form 1095-C — although of course you can opt to provide the form mid-year if the former employee requests it.
But then, just be sure to have your finance staff monitor whether any changes take place before the end of the year. For example, if the employee is rehired, you’ll need to furnish an updated Form 1095-C to reflect the info your company ultimately sends to the IRS.
Compliance Task #2: Sending returns to the IRS
Speaking of the Taxman, once your company gets those 1095-Cs to employees, you have another month to get returns to the IRS.
And if your company will be filing 250 or more returns, IRS expects you to do so electronically.
You do get a break, though. Electronic filers get an extra month to get their returns to the IRS. Your deadline will be March 31, 2016, compared to the Feb. 29 deadline for paper filers.
Info: For more compliance answers straight from the horse’s mouth, click irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-on-Reporting-of-Offers-of-Health-Insurance-Coverage-by-Employers-Section-6056; To read through IRS’s instructions for all the healthcare coverage reporting forms, click irs.gov/instructions/i109495c/ar01.html#d0e247