Understanding the 1094 and 1095 Forms

Understanding the 1094 and 1095 Forms

As we enter the second reporting year for the ACA, it is important that both you and your employees understand what reports are necessary for your organization’s annual filings.

What Is The 1095?
The 1095 form acts as your “proof of insurance”. There are three different 1095 forms: A, B, and C, and each form is filled out by a different party:

  • 1095 A: Filed by the marketplace
  • 1095 B: Filed by other insurers
  • 1095 C: Filed by the employer

Employees at your organization will most likely get a 1095 C. However, there are exceptions for employees that have opted out of your coverage or do not average 30+ hours per week. These employees will be insured through the marketplace or another insurer and will receive the 1095 A or B.

What Is The 1095 Used For?
1095 forms are needed to fill out U.S. Individual Income Tax Return for 2016 (1040; line 61), Premium Tax Credit (8962), and Health Coverage Exemptions (8965) forms.

What Is The 1094?
Like the 1095, the 1094 has three different forms that are filled out by whichever insuring company is being used:

  • 1094 A: Filed by the marketplace
  • 1094 B: Filed by other insurers
  • 1094 C: Filed by the employer

The insurer (the marketplace, other insurer, or the employer) sends each person insured a copy of their 1095. A copy of each employee’s 1095 is also sent to the IRS. The 1094 acts as a ‘cover sheet’ for the 1095s submitted to the IRS and includes information regarding the employer.

What Do I Need To Do As An Employer?
As an employer you will need to fill out and file a 1095 C for each of your employees that is insured through your organization. A copy of the 1095 C must be submitted to each employee insured, as well as to the IRS. You will also need to submit a 1094 C to the IRS with your organization information as well as the number of 1095 Cs included in your packet.

What Tools Are Available To Help?
The data needed to file 1095s are stored in an HRIS. The HRIS hosts electronic open enrollment and houses all benefits related information. It also stores and reports on hours worked, which shows which employees have averaged 30+ hours per week and are eligible for coverage. In order to ensure compliance, a unified HRIS is recommended to house data related to time & attendance, payroll, benefits, and more.

This DATIS Blog was written by Carley Donovan, DATIS, on December 8th, 2016 and may not be re-posted without permission.

Written by Carley Donovan