Employers should remember their COBRA continuants when reviewing ACA reporting. All individuals with health coverage, including COBRA continuants, should receive documentation of coverage. For an employer with a fully insured plan, coverage information will be communicated by the insurance company furnishing Form 1095-B to the COBRA continuant. For an employer with a self-funded plan, the employer will provide coverage information. In both cases, an employer required to furnish Form 1095-C to full-time employees should consider how to Code lines 14 and 16 for full-time employees who terminate employment or have a COBRA event mid-year and receive an offer of COBRA continuation coverage.
An offer of COBRA coverage that is made to a former employee due to termination of employment is not reported as an offer of coverage on Form 1095-C. If the employer is required to complete a Form 1095-C for the former employee (because, for example, the individual was a full-time employee for one or more months of the year before terminating employment), the employer should use code 1H, No Offer of Coverage, on line 14 for any month that the former employee was offered COBRA. Line 16 should be populated with Code 2A, employee Not Employed During the Month, for those same months in which the individual is not an employee (regardless of whether the former employee enrolled in COBRA coverage or not.
Employers should review reporting for COBRA continuants when preparing for ACA compliance.