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IRS Releases Final 2018 Forms 1094 and 1095

12.19.2018

The IRS has released draft Forms 1094/1095-B (B Forms) and Forms 1094/1095-C (C Forms), and related instructions, for the 2018 tax year. If your organization is considered an applicable large employer (ALE) under the Affordable Care Act, it’s important to stay up to speed on the details.

B vs. C

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

Meanwhile, the C Forms are filed by applicable large employers (ALEs) to comply with IRC Section Code 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.

Minor changes

The forms and instructions are largely unchanged from 2017. The Plan Start Month box continues to be optional on Form 1095-C for 2018. Parts I and III of Form 1095-C include separate fields for everyone’s first name, middle initial and last name, rather than a single blank for an individual’s full name. (This change is reflected in the C Form instructions; a similar change is made to Parts I and IV of Form 1095-B.)

Penalty amounts for reporting failures reflect indexed increases. Both sets of instructions explain, as in previous years, that the 250-return threshold that triggers mandatory electronic filing with the IRS applies separately for each type of form — that is, separately for Form 1095-B and Form 1095-C — and for original and corrected returns. The IRS has also released updated Publications 5164, 5165, 5258 and 5308, which provide technical details related to electronic filing.

Information strategy

Those responsible for filing will undoubtedly appreciate the absence of large changes from the 2017 forms and instructions. Notably, the instructions don’t refer to proposed regulations that would require aggregation of most information returns when determining the 250-return threshold for mandatory electronic filing. This seems to indicate a delay in the proposed January 1, 2019, effective date.

In addition, the instructions update the filing deadlines:

  • January 31, 2019, to furnish returns to individuals,
  • February 28, 2019, to file with the IRS on paper, and
  • April 1, 2019, to file with the IRS electronically.

These deadlines come quickly after the end of the year, so it’s essential to have a strategy for collecting and organizing the required information.

 

Sidebar: Wraparound coverage reporting form released

In June, the Centers for Medicare and Medicaid Services (CMS) released a form for use by plan sponsors offering limited wraparound coverage to satisfy the reporting required for the coverage to qualify as an excepted benefit.

Limited wraparound coverage — employer-sponsored coverage intended to supplement other specified types of coverage — was added as a new type of excepted benefit in 2015. Established as a pilot program, limited wraparound coverage can be first offered as an excepted benefit no earlier than January 1, 2016, and no later than December 31, 2018. It must end three years after first offered (with a special rule for collectively bargained coverage). In late 2017, the CMS issued a notice seeking comments on the possible extension of the pilot program as well as the content of a proposed reporting form.

The form, as finalized, largely mirrors the proposed version. It requires the plan sponsor to provide information such as the type of coverage the limited wraparound coverage is designed to supplement. Examples include eligible individual health insurance, a multistate plan or basic health program coverage. Sponsors must also note who’s eligible to enroll and the number of individuals enrolled. In addition, plan sponsors must describe the additional benefits that the limited wraparound coverage is designed to provide — for example, expanded in-network medical clinics or providers, or home health coverage. A glossary is included with definitions of key terms.

Plan sponsors need to file a form for each type of limited wraparound coverage that they offer. The form must be filed once within the later of 60 days after publication of the form (which was posted on the CMS website on June 25) or 60 days after the first day of the first plan year that the coverage is first offered. The instructions provide an email address where the completed form should be sent.

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