An applicable large employer (an employer with 50 or more full-time employees in the preceding tax year), must furnish Form 1095-C to all full-time employees or pay a tax penalty. An ALE must also provide a Form 1095 to its employees enrolled in health coverage.
Employers question when to provide a part-time employee Form 1095-B or Form 1095-C. The answer depends on the employer’s ACA measurement method and the individual’s coverage status.
An employee enrolled in an employer’s health coverage must receive either Form 1095-B or Form 1095-C, whether full-time or not full time. The actual form will depend on the employer’s plan structure. If the employer has a fully insured plan, Form 1095-B is typically provided by the insurance company. If the employer has a self-funded plan, coverage information is typically indicated on Form 1095-C but may alternatively be provided on Form 1095-B.
An employer using the lookback method for determining full-time status must consider an employee’s hours worked during the measurement period to determine if an employee who is considered “part-time” needs to be treated as full-time for ACA offers of coverage and form distribution.
If an employee works an average of 130 or more hours per month during the measurement period, that employee is considered full-time during the stability period and must receive Form 1095-C. This is the case even if the employee is considered “part-time” for other purposes and even if the employee actually works less than 30 hours per week (130 hours/month) during the stability period. Employees in this category would receive Form 1095-C whether they enroll in employer coverage or not.
If an employee does not work an average of 130 or more hours per month during the measurement period, but enrolls in employer-sponsored coverage, that employee would receive a Form 1095 even if the employee is part-time. The actual Form received (1095-B or 1095-C) will depend on the plan structure.
If an employee does not work an average of 130 or more hours per month during the measurement period and does not enroll in employer-sponsored coverage, that employee would not receive Form 1095-B or Form 1095-C.
An employer using the monthly measurement method must count hours for part-time employees on an ongoing basis and be provided to offer coverage for any month in which the employee works 130 or more hours (a maximum 3 month waiting period applies). A part-time employee who has full-time hours for any month would receive a Form 1095-C showing that the employee was full-time for ACA purposes.
Counting hours and providing appropriate forms is tricky, especially for part-time employees whose hours fluctuate around the 130 hours per month mark. BAS can help employers with ACA hours tracking and form distribution. For information, contact your account manager or solutions@BASusa.com.
