As a responsible employer, it is essential to understand the importance of filing a 1095-C, a document that provides information to the Internal Revenue Service (IRS) about health insurance offered to employees. In this article, we will explore the significance of filing a 1095-C, who is required to file it, and how to do it correctly.
What is a 1095-C?.
A 1095-C is a form used by employers to report information about the health insurance coverage offered to their employees. The form is used to determine if an employee is exempt from the individual mandate to have health insurance under the Affordable Care Act (ACA). The 1095-C is submitted to the IRS and must be furnished to each employee by January 31st of each year.
Who is Required to File a 1095-C?
A 1095-C must be filed by all applicable large employers with 50 or more full-time employees, including full-time equivalent employees, on their payroll as of January 1st of the tax year. This includes:
- Seasonal employers: Employers with a seasonal workforce pattern, such as those in the construction, agriculture, or retail industries.
- Forty-hour weekly employers: Employers with at least one full-time equivalent employee who worked 40 hours per week.
- Treat as a large employer: Employers with 50 or more full-time equivalent employees, including part-time employees, on their payroll on January 1st.
Who is Exempt from Filing a 1095-C?
The following employers are exempt from filing a 1095-C:
- Small employers: Employers with less than 50 full-time employees, including part-time employees, on their payroll on January 1st.
- Certain tax-exempt organizations: IRS-approved tax-exempt organizations, such as churches, schools, and non-profit organizations.
- Government entities: Federal, state, and local government agencies, as well as government contractors.
Why is Filing a 1095-C Important?
Filing a 1095-C is crucial for several reasons:
- Compliance with the ACA: The 1095-C is used to determine if an employee is exempt from the individual mandate to have health insurance.
- Reporting requirements: The 1095-C must be submitted to the IRS and furnished to each employee by January 31st of each year.
- Audit protection: Filing a 1095-C can help protect employers from potential audits and fines.
How to File a 1095-C Correctly?
To file a 1095-C correctly, follow these steps:
- Gather necessary information: Obtain the required information, such as employee names, dates of birth, and health insurance offer dates.
- Complete the 1095-C form: Use the correct form (IRC Form 1095-C) and complete it accurately.
- Sign and date the form: Ensure the form is signed and dated by an authorized representative of the employer.
- Submit the form to the IRS: Submit the form electronically or by mail by February 28th of each year.
- Furnish the form to employees: Furnish the form to each employee by January 31st of each year.
Important Deadlines and Penalties
- Furnish 1095-C to employees by January 31st: Failure to furnish the form to employees by this deadline may result in penalties.
- Submit 1095-C to the IRS by February 28th: Failure to submit the form to the IRS by this deadline may result in penalties.
- Late filing penalties: The IRS may impose penalties for late filing, which can range from $100 to $100 per day, up to a maximum of $50,000.
Conclusion
In conclusion, the 1095-C is an essential document that employers must file to comply with the Affordable Care Act. It is crucial for employers to understand who is required to file a 1095-C, how to file it correctly, and the importance of meeting the deadlines to avoid penalties. By following the guidelines outlined in this article, employers can ensure compliance and avoid potential financial penalties.
Additional Resources:
- [IRS Form 1095-C] (https://www.irs.gov/forms-pubs/about-form-1095-c)
- [IRS FAQs: Affordable Care Act] (https://www.irs.gov/affordable-care-act/individuals-families/individual-shared-responsibility-provision-frequently-asked-questions)
- [IRS Form 1095-C Instructions] (https://www.irs.gov/forms-pubs/about-form-1095-c-instructions)
Note: The information provided in this article is subject to change and may be updated by the IRS or other regulatory bodies. It is essential to consult the official IRS website and other reliable sources for the latest information and guidelines on filing a 1095-C.