As the deadline for furnishing Form 1095-C approaches, HR professionals are gearing up for the meticulous task of completing Lines 14 and 16—a critical aspect of Affordable Care Act (ACA) reporting. This year holds particular importance, because the IRS no longer will accept an argument of good-faith compliance to relieve penalties. This article delves into the intricacies of Line 16 which is the place on the form where employers identify an offer of health coverage.
Understanding Line 16
Line 16 of the Form 1095-C is where the employer identifies that one of the following situations applied to the employee.
While the Form instructions say to leave Line 16 blank if no indicator code applies, the IRS clearly does not like to see a blank space and often imposes penalties without a code in Line 16.
The available codes are as follows:
Tips for Accuracy
Conduct a thorough review of Line 16 codes for each employee before distributing forms. While reviewing, ensure consistency in coding among employees and adherence to conditional offer nuances.
By properly coding Line 16, HR professionals contribute to ACA reporting, ensuring compliance and accurate insights into the health coverage landscape of their organization.
Employers that use BAS for ACA Data Collection and Reporting can rest easy because BAS codes Line 16 automatically. For information about BAS’ ACA Data Collection and Reporting Service, contact your account manager or solutions@basusa.com.
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