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IRS Releases Draft Instructions for 2017 Forms 1094 and 1095


In September, the IRS released draft instructions for health-care-coverage information-reporting Forms 1094/1095-B (B Forms) and Forms 1094/1095-C (C Forms) for the 2017 tax year. (The draft forms were released earlier in the summer.) Although the changes are minimal, employers should prepare themselves for the filing process.


The B Forms are filed by minimum essential coverage (MEC) providers — mostly insurers and government-sponsored programs, but also some self-insuring employers and others. They use the forms to report coverage information in accordance with Internal Revenue Code (IRC) Section 6055.

The C Forms are filed by applicable large employers (ALEs) to comply with IRC Section 6056, providing information that the IRS needs to administer employer shared responsibility under IRC Section 4980H, as well as receipt of premium tax credits. (In addition to being filed with the IRS, Forms 1095-B and 1095-C are furnished to individuals.) ALEs with self-insured health plans also report coverage information on Form 1095-C.


The draft instructions for the B forms don’t include any substantive changes that will affect completion of the forms. The draft instructions for the C forms are also largely unchanged, though references to transitional relief available to non-calendar-year plans for certain months in 2016 have been eliminated now that this relief has expired.

Citing IRS Notice 2017-9, the draft instructions observe that a safe harbor is still available for de minimis errors in reporting dollar amounts on Line 15 of Form 1095-C (required employee contributions), excusing the ALE from having to file a corrected return for minor errors — unless the individual recipient elects for the safe harbor not to apply.

For purposes of determining affordability of employer-sponsored coverage, the draft instructions note inflation adjustments to the 9.5% threshold, increasing the percentage to 9.66% for plan years beginning in 2016 and 9.69% for plan years beginning in 2017. (The percentage will drop to 9.56% for plan years beginning in 2018.)

In addition, the draft instructions clarify that there’s no specific code to enter on Line 16 to indicate that an employee was offered MEC and declined the coverage.

And the instructions confirm the extension of the existing interim relief for multiemployer plans for another year. This means ALEs qualifying for this relief won’t need to obtain eligibility and other information from multiemployer plans for 2017 filings. (The instructions state that this approach may change for 2018 and later years.)

The deadlines to furnish statements to individuals and to file with the IRS have been updated from 2017 to 2018.


Those responsible for preparing and filing these forms will undoubtedly welcome the absence of major changes for the 2017 tax year. But the deadlines for furnishing forms to individuals and filing with the IRS arise quickly after year end. And there’s been no indication that they’ll be extended. So it’s essential to have a strategy for collecting and organizing the required information.

IRS Information Letters Address Recent Executive Orders

In August, the IRS’s Office of Chief Counsel released four information letters that explain how recent presidential executive orders affect employer shared responsibility and the individual mandate under the Affordable Care Act (ACA).

Letters 2017-0010 and 2017-0013 respond to inquiries about the application of the employer shared-responsibility requirements under Internal Revenue Code Section 4980H. The letters emphasize that no waivers are available under Sec. 4980H, including for financial or religious reasons. They note that the executive order directing agency heads with responsibility under the ACA to minimize the law’s “unwarranted economic and regulatory burdens” didn’t change the ACA and the law remains in force until changed by Congress.

Letter 2017-0010 includes a reminder that an accommodation process is available to qualifying employers with religious objections to providing certain contraceptive coverage without cost-sharing under the ACA’s preventive services requirement. An executive order also directs the agencies to consider amending the preventive services regulations to address conscience-based objections to the contraceptive coverage mandate.

Letters 2017-0011 and 2017-0017 respond to questions about the individual shared responsibility requirements under Section 5000A. The letters explain that the law requires individuals to:

  • Maintain minimum essential coverage for each month,
  • Qualify for a coverage exemption, or
  • Pay a penalty when filing their federal income tax return.

Similar to the employer shared responsibility letters, these letters state that the executive order directing the agencies to minimize the ACA’s burdens doesn’t change the application of the individual mandate, and taxpayers remain required to follow the ACA.


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