HRB 132 - 1) IRS Releases 2017 Final Forms and Instructions for 1094/1095 Series; 2) Fee Reminders: Health Insurer Provider Fee and Transitional Reinsurance Fee
Released October 4, 2017 I Download as a PDF
2017 ACA Reporting Forms 1094 and 1095 Series
The 2017 Affordable Care Act reporting is upon us. The forms to be used, and the instructions for those forms, have just been released by the Internal Revenue Service. As a reminder, there are two annual reporting obligations imposed by IRC Section 6055 minimum essential coverage reporting, and by IRC Section 6056, employer shared responsibility reporting.
- The minimum essential coverage (MEC) reporting obligation is accomplished on the Form 1094-B transmittal and Form 1095-B statement to individuals. Generally, this reporting is accomplished by the insurer if the plan is insured. If the plan is self-funded, the employer is obligated to complete the MEC reporting and disclosure.
- Employers subject to employer shared responsibility (those employing 50 or more employees as of December 31, 2016 for the 2017 reporting year), can accomplish the MEC obligation by completing Part III of the Form 1095-C. Employers not subject to employer shared responsibility reporting accomplish the MEC reporting obligation by reporting the B series described above. The employer shared responsibility reporting obligation is accomplished on the Form 1094-C transmittal and the Form 1095-C statement to individuals.
Following are links to the particular forms and instructions:
Health Insurance Coverage Reporting by Insurers and Sponsors of Self-funded Plans (IRC § 6055)
- Instructions for 2017 Forms 1094-B and 1095-B (PDF)
- Form 1094-B, Transmittal of Health Coverage Information Returns
- Form 1095-B, Health Coverage
Employer Health Insurance Reporting Requirement (IRC § 6056)
- Instructions for 2017 Forms 1094-C and 1095-C (PDF)
- Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
Deadlines for Filing and Distributing Forms 1094 and 1095
- Statements to individuals for both the B and C series must be furnished by January 31, 2018. Entities can request an extension for furnishing the statements by sending a letter to the IRS (see the instructions for the required content of the letter to request the extension and mailing address).
- Electronic filing of the forms must be accomplished by April 2, 2018; or, February 28, 2018 if filing by paper. At this point, no delay has been granted for filing these forms. An automatic 30-day extension is available by filing a Form 8809.
Changes to the Forms and Instructions. Generally, the 2017 forms are similar to the 2016 forms. Narrowing our focus on the C series of the forms, following are a couple clarifications and modifications:
- Several forms of transitional relief were available in 2015. To the extent the relief is no longer available, references to such relief have been removed.
- The instructions clarify that for purposes of the 9.5% affordability safe harbors and qualifying offer method references, the adjusted indexed percentage is 9.66 percent for plan years beginning in 2016, and 9.69 percent for plan years beginning in 2017. For 2018, the percentage decreases to 9.56 percent.
- With regard to making corrections to filed forms, the instructions indicate that a Form 1095-C filed with incorrect dollar amounts on line 15, Employee Required Contribution, may fall under a safe harbor for certain de minimis errors. The safe harbor generally applies if no single amount in error differs from the correct amount by more than $100. If the safe harbor applies, then the reporting entity would not be required to correct the Form 1095-C to avoid penalties. However, if the recipient elects for this safe harbor not to apply, then the reporting entity may have to issue a corrected Form 1095-C to avoid penalties.
- Part II of the Form 1095-C contains a box to indicate a 2-digit number designating the start month of the plan. The obligation to complete this box remains optional for 2017 reporting purposes.
- Certain multiemployer transition relief is still available.
Information reporting penalties. The penalties for failure to provide the information return or provide correct payee statement remain essentially the same.
- The penalty for failure to file a correct information return is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,218,500.
- The penalty for failure to provide a correct payee statement is $260 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,218,500.
- Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to file the returns and furnish the required statements.
Additional information relating to ALE obligations including the ACA Information Returns (AIR) system, can be found on the IRS’s dedicated webpage, ACA Information Center for Applicable Large Employers (ALEs). Also see:
Fee Reminders: Health Insurer Provider Fee and Transitional Reinsurance Fee
- Return of the Annual Health Insurer Provider Fee. As mentioned this summer, covered entities and insurers will become subject to the ACA’s health insurer provider fee again, beginning January 1, 2018. These entities were given a one-year moratorium for 2017. Although employers are not subject to these fees, the covered entity/insurer may pass along some of these costs to employer/policyholders; thus, employers with insured plans may begin seeing this fee reflected in their renewals.
- Transitional Reinsurance Fee Reminder. The transitional reinsurance fee and related reporting obligation was imposed over a three-year period from 2014 to 2016. For the last year of the program, insurers and plan sponsors of self-funded plans were obligated to submit their 2016 form reflecting the annual enrollment count of covered lives by November 15, 2016. The full fee was due by January 17, 2017. However, for reporting entities who opted to make two payments, the deadline for submitted the Form remains November 15, 2016, with the first part of two payments due by January 17, 2017; the second payment is due by November 15, 2017.
About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Kansas City office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.