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 Lines 14 and 16 of Form 1095-C is the most difficult part of the form preparation. Line 14 is used to identify an employer’s offer of coverage. 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 14 and 16 are accomplished by using one of the Codes identified by the IRS for each month of the year. A brief summary of the Codes follows.
Line 14 Codes
- Qualifying Offer. The employer makes a qualifying offer of coverage, which is an offer of minimum essential coverage providing minimum value, with an Employee Required Contribution not less than 9.5% (as adjusted) of the mainland single federal poverty line, and at least minimum essential coverage offered to spouse and dependents. Line 15 is left blank for any month in which Code 1A is listed on line 14.
- Minimum essential coverage providing minimum value offered to the employee, only.
- Minimum essential coverage providing minimum value offered to the employee, and minimum essential coverage offered to dependents (not spouse).
- Minimum essential coverage providing minimum value offered to the employee, and minimum essential coverage offered to spouse (not dependents).
- Minimum essential coverage providing minimum value offered to the employee, and at least minimum essential coverage offered to spouse and dependents. Do not use 1E if the coverage for the spouse was offered conditionally. Instead use code 1K.
- Minimum essential coverage NOT providing minimum value offered to employee; employee and spouse or dependents; or employee, spouse and dependents.
- Offer of coverage for at least one month of the calendar year to an individual who was not an employee for any month of the calendar year or to an employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in self-insured coverage for one or more months of the calendar year. Code 1G applies for the entire year or not at all. 15 and 16 are left blank if 1G is entered in Line 14.
- No offer of coverage (employee not offered any health coverage or employee offered coverage that was not minimum essential coverage). May include one or more months in which the individual was not an employee.
- This Code is reserved and not used on the 2017 Form 1095-C.
- Minimum essential coverage providing minimum value offered to employee, minimum essential coverage conditionally offered to the spouse, and no offer coverage to dependents.
- Minimum essential coverage providing minimum value offered to employee, minimum essential coverage offered to dependents, minimum essential coverage conditionally offered to the spouse.
Line 16 Codes
- Not employed during the month. This Code indicates that the individual was not employed on any day during the month.
- 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.
- 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.
- Employee in 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.
- Multiemployer plan interim relief. This code is used to have an ALE member being 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.
- W-2 safe harbor. This code may be used to show affordability based on W-2 earnings.
- Federal poverty line safe harbor. This code may be used to show affordability based on the federal poverty level.
- Rate of pay safe harbor. This code may be used to show affordability based on rate of pay.
Employers must be familiar with the logic behind the Line 14 and 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.