IRS reporting requirements

under the Affordable Care Act

Is your business ready?

The ACA reporting deadlines of January 31 for individual statements and March 31 for corporate
returns are fast approaching. Most organizations have made the necessary modifications to their
benefit plan structure to comply with the Affordable Care Act (ACA). These same organizations are now
turning their attention to dealing with the complex IRS reporting requirements.

Items to consider as part of your IRS reporting checklist:

Have you identified all common law employees and non-employees

that will require a Form 1095-C?

Have you determined the ACA implications and reporting requirements

related to your merger and acquisition activity?

Do all entities and businesses use the same data platforms?

Does your system have the necessary logic capabilities to correctly

translate data into ACA indicator codes on a monthly basis?

Have you considered the internal cost and resources needed to create
an interface to file Forms 1094-C and 1095-C with the IRS?

Do you have the taxpayer identification numbers (TINs) for all

of your employees and their dependents?

In a recent Ernst & Young LLP poll of more than 3,000 executives,
only 11% answered that they had addressed the technology
requirements for IRS and employee reporting.

11%
Yes, we have this
covered and know
our current IT
systems support the
ACA implementation
requirements

43%
We are developing
a process

46%
I dont know

Key questions related to the ACA excise tax and IRS reporting
requirements to avoid significant exposure to penalties.
Significant technology changes may be needed for tracking
employee eligibility and IRS reporting requirements

up to

$1,500,000/entity

$100/return

$100/form

that is not accurate

not filed on time

IRC 6055 and 6056 reporting remains a key concern for executives with regard to implementing ACA. Given the amount
of information that must be aggregated for each employee, on a month-by-month and entity-by-entity basis, that isnt
surprising. Addressing the following questions can help confirm that your organization is truly prepared.
1 Who will be responsible for completing and certifying
the accuracy of the IRS Transmittal Form 1094-C
and filing it with the IRS in March 2016? Who is
responsible for the 1095-C employee statement
creation and distribution to employees on or before
February 1, 2016? Who is responsible for reporting
for any non-employees enrolled in your self-insured
plans (e.g., retirees, COBRA)?

4 Who is responsible for confirming that the Forms

1095-C and 1094-C have been coded correctly and
completed in compliance with the regulations and
instructions? By transmitting the Forms electronically
to the IRS under the employers FEIN, the employer is
certifying that the information is true and accurate
under penalty of perjury.

5 Who is responsible for ensuring that your organization

2 Have you identified all source systems that contain
will not incur the IRS penalty of $100 per return
120115
the information necessary to complete the filing and
transmittal to the IRS (capped
at $1.5 million)
and
OMB No. 1545-2251
CORRECTED
Transmittal
of
Employer-Provided
Health
Insurance
Offer
and
Form1094-C
statements? Have you identified allCoverage
outside providers
$100 per form to be provided to eligible individuals
Information Returns
2014
Department of the Treasury
Information
about Form
1094-C benefits
and its separate instructions (capped
is at www.irs.gov/f1094c.
that
might
information
(e.g.,
at $1.5 million per occurrence) for
late or
Internal Revenue
Servicehave required
Applicable Large Employer Member (ALE Member)
Part
I
administrator,
COBRA
administrator,
third-party
erroneous
filings?
2 Employer identification number (EIN)
1 Name of ALE Member (Employer)
disability payers)?
3 Street address (including room or suite no.)
6 Have you developed a process for identifying and
3 Have
issuing6 Country
corrected
filings
and ZIP or foreign
postal code and employee statements?
4 City oryou
town confirmed the information can be
5 State or province
extracted
in
the
format
you
will
need
to
Have
you
budgeted
for any excise tax related
7 Name of person to contact
8 Contact telephone number
complete the filing and statements
penalties under ACA for 2015?
9 Name of Designated Government Entity (only if applicable)
10 Employer identification number (EIN)
(e.g., month by month, FEIN)?
7 Who is responsible for responding to requests from
11 Street address (including room or suite no.)
For Official
Only of
an IRS audit? Who is responsible
for theUse
outcome
14 Country and ZIP or foreign postal code
12 City or town
13 State or province
an IRS audit?
15 Name of person to contact

16 Contact telephone number

Who is responsible??
17 Reserved .

18 Total number of Forms 1095-C submitted with this transmittal

Part II

ALE Member Information

19 Is this the authoritative transmittal for this ALE Member? If Yes, check the box and continue. If No, see instructions

20 Total number of Forms 1095-C filed by and/or on behalf of ALE Member .

21 Is ALE Member a member of an Aggregated ALE Group?

Yes

No

If No, do not complete Part IV.

22 Certifications of Eligibility (select all that apply):
A. Qualifying Offer Method

B. Qualifying Offer Method Transition Relief

C. Section 4980H Transition Relief

D. 98% Offer Method

Under penalties of perjury, I declare that I have examined this return and accompanying documents, and to the best of my knowledge and belief, they are true, correct, and complete.

Signature

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

Title
Cat. No. 61571A

Date
Form 1094-C (2014)

Anatomy of a 1095-C

1095-C

Part I

Part
Part I

Information

Applicable Large Employer Member (Employer)

1 Name of employee

2 Social security number (SSN)

7 Name of employer

3 Street address (including apartment no.)

Part II

2014

8 Employer identification number (EIN)

9 Street address (including room or suite no.)

5 State or province

4 City or town

Part
Part II
II

OMB No. 1545-2251

CORRECTED

about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.

Employee

600115

VOID

Employer-Provided Health Insurance Offer and Coverage

Form
Department of the Treasury
Internal Revenue Service

6 Country and ZIP or foreign postal code 11 City or town

10 Contact telephone number

12 State or province

13 Country and ZIP or foreign postal code

Employee Offer and Coverage

All 12 Months

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

14 Offer of
Coverage (enter
required code)
15 Employee Share
of Lowest Cost
Monthly Premium,
for Self-Only
Minimum Value
Coverage

16 Applicable
Section 4980H Safe
Harbor (enter code,
if applicable)

Part III

Part
PartIII
III Covered Individuals
If Employer provided self-insured coverage, check the box and enter the information for each covered individual.
(a) Name of covered individual(s)

(c) DOB (If SSN is

not available)

(b) SSN

(d) Covered
all 12 months

(e) Months of Coverage

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

17

18

19

20

21

22
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

1095-C

Part I

Information

Applicable Large Employer Member (Employer)

1 Name of employee

2 Social security number (SSN)

3 Street address (including apartment no.)

5 State or province

4 City or town

Part II

2014

7 Name of employer

8 Employer identification number (EIN)

9 Street address (including room or suite no.)

10 Contact telephone number

6 Country and ZIP or foreign postal code 11 City or town

12 State or province

13 Country and ZIP or foreign postal code

Employee Offer and Coverage

All 12 Months

Jan

Feb

14 Part
Offer of I Description
Coverage (enter
required code)

15 Employee
Employee Share
demographic
of Lowest Cost
Monthly
Premium,
name,
SSN, address
for Self-Only
Minimum Value
$
$
Coverage

info.

16 Employer
Applicable
demographic
Section 4980H Safe
Harbor
(enterEIN,
code, address,
name,
if applicable)

info:

Mar

Line(s)
1-6

7 - 13

Apr

May

System(s)

June

July

Aug

Sept

Complexities

Oct

Nov

Dec

HRIS
$

Payroll

Multiple 1095-C forms possible if full-time employee

in more than one FEIN during reporting year

contact info

Part III

OMB No. 1545-2251

CORRECTED

about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.

Employee

600115

VOID

Employer-Provided Health Insurance Offer and Coverage

Form
Department of the Treasury
Internal Revenue Service

Form 1095-C (2014)

Cat. No. 60705M

Covered Individuals

If Employer provided self-insured coverage, check the box and enter the information for each covered individual.
(a) Name of covered individual(s)

17

18

19

20

21

22

(b) SSN

(c) DOB (If SSN is

not available)

(d) Covered
all 12 months

(e) Months of Coverage

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

9 Street address (including room or suite no.)

3 Street address (including apartment no.)

5 State or province

4 City or town

Part
Part IIII

6 Country and ZIP or foreign postal code 11 City or town

10 Contact telephone number

12 State or province

13 Country and ZIP or foreign postal code

Employee Offer and Coverage

All 12 Months

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

14 Offer of
Coverage (enter
required code)
15 Employee Share
of Lowest Cost
Monthly Premium,
for Self-Only
Minimum Value
Coverage

16 Applicable
Section 4980H Safe
Harbor (enter code,
if applicable)

Part III

Covered Individuals

provided self-insured coverage, check the box and enter the information for each covered individual.
Part IfIIEmployer
Description
Line(s)
System(s)
Complexities
(a) Name of covered individual(s)

(c) DOB (If SSN is

not available)

(b) SSN

Information regarding offer of

coverage made to employee

14

(d) Covered
all 12 months

HRIS, Payroll,
TPAs

17

(e) Months of Coverage

Jan

18

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

Indicate whether or not employee is under an offer of

coverage if so, indicate the type of coverage offered,
for each month (if employee is full-time, as defined by ACA,
indicator codes will be different additionally, if employer
qualifies for and utilizes alternative reporting methods
the codes will be different)

19

Information regarding cost

of coverage offered

15

HRIS, TPA

Report amount of lowest cost self-only premium offered

to employeefor each month; amount can change if
employment status changes and employee becomes eligible
for different plans at different rates

16

Payroll, HRIS,

For each month, enter applicable

was
600115
VOID safe-harbor code that

20

21

Information regarding
of

1095-C

22affordability

metCoverage
had the employee not taken up coverage OMB No. 1545-2251
Employer-Provided HealthTPA
Insurance Offer and

Form
coverage offered
Department of the Treasury
Information about Form 1095-C and its separate instructions is at www.irs.gov/f1095c.
For Privacy
ActService
and Paperwork Reduction
Act Notice, see separate instructions.
60705M
Internal
Revenue
UnlessCat.
theNo.FPL
safe

Part I

1 Name of employee

2 Social security number (SSN)

Part II

7 Name of employer

identification number (EIN)

tests may have different applicability 8orEmployer
be unavailable
for certain types of employees

9 Street address (including room or suite no.)

3 Street address (including apartment no.)

5 State or province

4 City or town

6 Country and ZIP or foreign postal code

Jan

Feb

Mar

Apr

10 Contact telephone number

(by
day) and termination
information
11 City or town Enrollment data
12 State
or province
13 Country
and ZIP or foreign(should
postal code
coverage end on date of termination) must also be considered

Employee Offer and Coverage

All 12 Months

2014

CORRECTED
Formtests
1095-C (2014)
harbor is utilized, affordability
Applicable
Large
Employer
Member
(Employer)
will have to be considered using payroll
data Safe harbor

Employee

May

June

14 Offer of
Coverage (enter
required code)

Aug
Sept
Oct which the
Novemployer
Dec
LogicJuly
could be different
in
months for
qualified for transition relieflikely a separate analysis

15 Employee Share
of Lowest Cost
Monthly Premium,
for Self-Only
Minimum Value
Coverage

Part II requires
information
of coverage
stipulated
$
$
$ related
$ to offers
$
$
$
$ in IRS$ Section
$ 6056 $ Employer
$ Mandate
$

16 Applicable
Section 4980H Safe
Harbor (enter code,
if applicable)

Part
PartIII
III Covered Individuals
If Employer provided self-insured coverage, check the box and enter the information for each covered individual.
(a) Name of covered individual(s)

(b) SSN

(c) DOB (If SSN is

not available)

(d) Covered
all 12 months

(e) Months of Coverage

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

17

18

19

20

21

22
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 60705M

Form 1095-C (2014)

Part III - Description

Line(s)

System(s)

Complexities

Responsible and/or covered

individual demographic info:
Name, SSN or DOB

17 - 22

HRIS, TPA

For each month, indicate whether individual was

enrolled for at least one day in the month
Info will need to be reported for employees,
non-employees (e.g., students, retirees,
COBRA participants) and dependents

Part III requires information related to covered individuals stipulated in IRS Section 6055 - Individual Mandate

Ernst & Young LLP - helping you navigate the ACA reporting maze

Reporting requirements
under the ACA are
far more complex
than W-2 processing.

Selecting the correct 1095-C Part II codes

from multiple options
Example: The employee is in an initial measurement
and associated administrative period JanuaryJuly,
and is determined to be not full time under 4980H
AugustDecember. The employee is under an offer
of coverage based on the employers benefit plan
eligibility beginning April 1.
Reporting: Code 1G will be reported on Line 14 (not full
time for any calendar month but under an offer of
coverage and enrolled for at least one calendar month),
Line 15 will be blank, and Line 16 will be 2D for
JanuaryMarch and 2C for AprilDecember.
Ernst & Young LLP will derive the applicable
coding for Part II of the 1095C based
elements and client configuration.
Like W2s, the IRS has provided specific codes.
Unlike W2s, multiple data points must be
compared and assessed to determine the
most appropriate code for the 1095C.

Reporting is at the ALE member firm/FEIN level,

not the controlled group
Example: Employee is full time and works for two applicable
large employer (ALE) member firms. The employer in
which the employee worked the most hours is treated as
the employer for that month. That is, assume in one month
employee works 100 hours for entity A and 60 hours for
entity B, and the next month employee works 70 hours for
entity A and 90 hours for entity B.
Reporting: Employee will be treated as an employee of
Entity A in the first month and receive a 1095C from it
for that month. For the second month, Employee will
receive a 1095C from entity B covering that month.
The employee will receive two 1095-C statements,
one for each employer.
Ernst & Young LLP will accept and track
multiple FEINs for a single employee and
report accordingly.
Like W-2s, an employee may receive more
than one 1095-C for a calendar year.
Unlike W-2s, the annually provided
1095-C reporting is broken out on a
month-by-month basis.

Reporting not required for every individual

Example: Employee is not full time under 4980H,
and not enrolled in the employers medical plan
for any month in the calendar year.
Reporting: Not required.
Ernst & Young LLP will prepare a 1095-C
employee statement for each individual for
whom a statement is required.
Like W-2s, employers are required to report
to the IRS.
Unlike W-2s, some employees will not
receive a 1095-C depending on their
individual situation.

Reporting corrections
Example: Employee has a baby December 1, 2015, but
waits until late January 2016 to enroll the baby, with
coverage retroactive to December 1. The 1095-C was
issued prior to the employee enrolling the baby.
Reporting: A corrected 1095-C may be issued
for 2015, reflecting the babys enrollment in
December 2015.

Alternative reporting and transition analysis

Ernst & Young LLP can provide Advisory
services related to alternate reporting
and transitional relief:
Non-calendar year plans
98% offer method
Multiemployer plan interim relief

Ernst & Young LLP will be able to issue

corrected 1095-Cs and 1094-Cs to reflect
retroactive changes such as change in
full-time status, coverage offers,
enrollments and TIN corrections.

Like W-2s, corrected forms will be required.

Unlike W-2s, the employer may be limited

in its ability to manage the volume, and
corrections could occur for many months
after the close of a calendar year.

The Ernst & Young LLP advantage

Ernst & Young LLP provides comprehensive end-to-end ACA services to help reduce the need for large-scale technology
upgrades and commitment of internal resources.

IRS reporting
Allowing companies to focus on
the business of their business

6055

1094-C

6056

1095-C

ACA COMPASSSM capabilities

Define eligible employees under the Employer Mandate

Determine ongoing employment status based on

actual hours worked, by entity

Evaluate 4980H(a) excise penalty risk by entity

(95% rule, 70% for 2015)

Identify location of all data elements required

for employer reporting

6055 and 6056 reporting data by month by entity

Client ACA knowledge required: Low

Client internal resources required: Low

ACA excise tax risk: Low

Client dashboard

Employees/
covered individuals

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