Final 2021 1094-C, 1095-C ACA Reporting Forms Issued by IRS

November 15, 2021

The IRS recently released final versions of the 2021 Affordable Care Act (ACA) forms, which include 1094-C and 1095-C. What should employers know about this important component of healthcare compliance reporting?

New 2021 ACA Forms Issued by IRS

The IRS issued final versions for four 2021 ACA forms, including Forms 1094-B, 1095-B, 1094-C, and 1095-C. The forms can be accessed using the following links:

The IRS also released draft instructions for Forms 1094-C and 1095-C for employers and HR teams, as well as draft instructions for Forms 1094-B and 1095-B.

What are the ACA forms?

The Affordable Care Act (ACA) requires employers with 50 or more full-time equivalent employees—known as Applicable Large Employers (ALE)—to offer healthcare coverage to full-time employees or potentially face a fine. The IRS uses Forms 1094-C and 1095-C to keep track of this information from one year to the next. But what, exactly, are each of these forms you file with IRS?

1095-C: This document helps the IRS determine whether the employer owes a penalty for not offering qualifying coverage.
Note: A 1095-C must be filed for every person employed that year, not just current employees.
1094-C: This document can be thought of as a cover sheet for all of an organization’s 1095-Cs. It isn’t distributed to employees and requires information such as the number of people employed and how many 1095-C forms are being filed.

Form 1095-C Updates for Filing in 2022

While the forms remain mostly unchanged, there are a few updates to the Form 1095-C. Two new codes (1T and 1U) were added for individual coverage HRAs (ICHRAs)offered to the employee and spouse, but not to dependents. Here\’s how the new codes work:

Code 1T: This code applies when an ICHRA was offered to an employee and spouse without dependents. The affordability of the plan was determined using the Zip Code of the employee\’s primary residence.
Code 1U: This code applies when an ICHRA was offered to an employee and spouse without dependents. The affordability of the plan was determined using the Zip Code of the employee\’s primary employment site.

The rest of the forms should look familiar from last year.

What are ICHRAs?

Established by federal ruling in 2019, individual coverage HRAs are account-based health plans that allow employers to better control healthcare costs by providing employees with defined, non-taxed reimbursements for qualified health insurance expenses.

This can include monthly premiums for individual plans purchased through the Marketplace or through private insurance companies.

What Else Should Employers and HR Know About Form 1095-C in 2022?

Last year, the IRS announced an extension of the furnishing deadline for Forms 1095-B and 1095-C. There is no deadline extension this year, and it is not expected that one will be announced. The deadlines are as follows:

January 31st, 2022 is the deadline for providing individuals with Forms 1095-B or 1095-C.
February 28, 2022 for those filing paper copies.
March 31, 2022 for those choosing to file electronically.

Source: Bernie Portal