Hays Companies Research and Compliance Department ACA Bulletin

The IRS recently released the 2017 draft versions of the 1095-C, 1094-C, 1095-B and 1094-B forms for use in reporting coverage offers under the Affordable Care Act.

Generally, employers will use the Form 1095-C to report offers of health plan coverage to the individual and will also use Form 1094-C, which is then provided to the IRS.

There are a few changes to the forms and instructions from previous years, none of which are too drastic.  Here is what has changed:

·         Section 4980H Transition Relief. Several forms of transition relief were available to some employers under Section 4980H for the 2015 plan year (including any portion of the 2015 plan year that fell in 2016).  However, no Section 4980H transition relief is available for 2017.  Form 1094-C has been revised to remove references to this transition relief.

Specifically, the two sections on Form 1094-C and 1094-B related to this transition relief have been designated as “Reserved” and should not be used. They are:

Part II, in the “Certifications of Eligibility” Section on Line 22, Box C

Part III, in the “ALE Member Information – Monthly” table, column (e).

·         Instructions for Recipient. The Form 1095-C and the 1095-B include an “Instructions for Recipient” section which states: “Additional information. For additional information about the tax provisions of the Affordable Care Act (ACA), including the individual shared responsibility provisions, the premium tax credit, and the employer shared responsibility provisions, see www.irs.gov/Affordable-Care-Act/Individuals-and-Families or call the IRS Healthcare Hotline for ACA questions (1-800-919-0452).”

·         Updated Penalty Amounts. The adjusted penalty amount for 2017 is $260 per violation, with an annual maximum of $3,218,500 (up from a maximum of $3,193,000, for 2016).

·         Code Series 2 (Section 4980H Safe Harbor Codes and Other Relief). The 2017 draft instructions for Forms 1094-C and 1095-C clarify that there is no specific code to enter on line 16 to indicate that a fulltime employee who was offered coverage either did not enroll or waived the coverage.

·         Corrected Forms 1095-C. The 2017, the draft instructions indicate that Forms 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, employers will not have to correct Form 1095-C to avoid penalties. However, if the recipient elects for the safe harbor not to apply, the employer may have to issue a corrected Form 1095-C to avoid penalties. For more information, see Notice 2017-9.

·         Formatting Returns Filed with the IRS. Both sets of 2017 draft instructions clarify that all returns filed with the IRS must be printed in landscape format.

Remember,  Forms 1095-C and/or 1095-B must be provided to individuals by January 31, 2018.  Form 10945-C and/or 1094-B must be filed by February 28, 2018 if filing a paper copy. If filed electronically, it must be sent no later than March 31, 2018.

Please contact your Hays Companies representative for more information on reporting under the Affordable Care Act.