Introduction to Forms 1094 and 1095
The Affordable Care Act (ACA) requires certain employers to file information returns with the IRS, reporting health insurance coverage offered to employees. Forms 1094 and 1095 are used for this purpose, with Form 1094 serving as a transmittal form and Form 1095 providing details about the coverage.
Employers must understand their obligations under the ACA to ensure compliance and avoid penalties. This includes determining whether they are an applicable large employer (ALE) and what information must be reported on Forms 1094 and 1095.
Applicable Large Employers (ALEs) and Filing Requirements
An ALE is an employer with 50 or more full-time employees, including full-time equivalent employees. ALEs are required to file Forms 1094 and 1095 with the IRS, reporting health insurance coverage offered to employees and their dependents.
The filing requirements apply to ALEs that offer self-insured health plans, as well as those that offer fully insured plans. Employers must report the number of full-time employees, the number of employees offered coverage, and the number of employees who accepted coverage.
Information Reported on Forms 1094 and 1095
Form 1095 reports information about the health insurance coverage offered to each employee, including the employee's name, address, and Social Security number. It also reports the months during which coverage was offered, as well as the cost of the coverage.
Form 1094 is a transmittal form that accompanies the Forms 1095, providing a summary of the information reported on the individual Forms 1095. It includes the employer's name, address, and Employer Identification Number (EIN), as well as the number of Forms 1095 being transmitted.
Consequences of Non-Compliance
Employers who fail to file Forms 1094 and 1095 or who file incomplete or inaccurate forms may be subject to penalties. The IRS may impose penalties of up to $250 per form, with a maximum penalty of $3 million per year.
In addition to penalties, non-compliance can also result in negative consequences for employees, including the loss of subsidies for health insurance purchased through the Health Insurance Marketplace.
Conclusion and Next Steps
Employers must take their obligations under the ACA seriously, ensuring compliance with the filing requirements for Forms 1094 and 1095. This includes understanding who is required to file, what information must be reported, and the consequences of non-compliance.
Employers who are unsure about their obligations or need assistance with filing Forms 1094 and 1095 should consult with a qualified tax professional or attorney to ensure compliance and avoid penalties.
Frequently Asked Questions
What is the deadline for filing Forms 1094 and 1095?
The deadline for filing Forms 1094 and 1095 is February 28th for paper filers and March 31st for electronic filers.
Who is considered a full-time employee for purposes of the ACA?
A full-time employee is an employee who works at least 30 hours per week or 130 hours per month.
What information must be reported on Form 1095?
Form 1095 reports information about the health insurance coverage offered to each employee, including the employee's name, address, and Social Security number.
Can I file Forms 1094 and 1095 electronically?
Yes, employers can file Forms 1094 and 1095 electronically, which is required for employers who file 250 or more returns.
What are the penalties for non-compliance with the ACA filing requirements?
The IRS may impose penalties of up to $250 per form, with a maximum penalty of $3 million per year.
Do I need to file Forms 1094 and 1095 if I have fewer than 50 employees?
No, employers with fewer than 50 employees are not required to file Forms 1094 and 1095, unless they are a self-insured employer.