Completing Line 16 of Form 1095-C

Last week our Health Care Reform article explained the Codes for completing Line 14 of Form 1095-C. This week we focus on completing Line 16 of Form 1095-C.

Applicable Large Employers (those with 50 or more full-time/full-time equivalent employees in the prior year) should be in the process of completing their ACA forms.  An ALE must furnish Form 1095-C to full-time employees and employees covered under a self-funded health plan.

Accurately completing 16, along with Line 14, of Form 1095-C is the most difficult part of the form preparation. Line 16 is used to identify specific situations applying to employees which may impact either the employer’s need to offer health coverage or the employee’s requirement to have coverage. Reporting on Lines 16 is accomplished by using one of the Codes identified by the IRS for each month of the year. A brief summary of the Line 16 Codes follows.

  • 2A- Employee Not employed during the month. This Code indicates that the individual was not employed on any day during the month.
  • 2B- Not a full-time employee. This Code indicates that the employee was not a full-time employee for the month and did not enroll in coverage.  It also is used when an employee terminates employment during the month and the offer of coverage ended before the end of the month due to the termination.
  • 2C- Employee enrolled in coverage for the month and coverage effective for the entire month. This code can be used only if the employee was a full-time employee for at least one month during the year.
  • 2D- Employee in a limited non-assessment period. This code is used if there is a period during which a penalty would not be assessed if coverage is not offered. These periods include: first three months of first calendar year as ALE member; waiting period under the monthly measurement method; waiting period under the look-back measurement method; initial measurement period and administrative period under look-back method; period following change in employment status under look-back measurement method; first calendar month of employment.
  • 2E- Multiemployer plan interim relief. This code is used to indicate an ALE member is treated as offering health coverage if the employer is required by a collective bargaining agreement to make contributions to a plan that does not offer minimum essential coverage.
  • 2F- W-2 safe harbor. This code may be used to show affordability based on W-2 earnings.
  • 2G- Federal poverty line safe harbor. This code may be used to show affordability based on the federal poverty level.
  • 2H- Rate of pay safe harbor. This code may be used to show affordability based on rate of pay.

Employers should be familiar with the logic behind the Line 16 codes to report properly on coverage and offers of coverage. BAS’ MyEnroll.com health care reform data collection and reporting tool can help employers identify and apply the appropriate codes, automatically. For assistance with ACA compliance, and completing and the distributing required forms, contact your account manager or solutions@BASusa.com.

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