1095 confusion: Prepare answers to employee questions ahead of time

Even though the IRS has provided transitional relief from the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) information reporting requirements, many employers have completed their 1095 forms and have them ready to go out to employees. The International Foundation of Employee Benefit Plans (IFEBP) cautions that when employees receive these forms, there will be plenty of questions. Employers should prepare answers to some basic employee questions before the 1095 forms are sent to employees.

Transition relief. Sec. 1514 of the ACA added Sec. 6056 to the Code, which requires annual information reporting by applicable large employers (ALEs) relating to the health insurance that the employer offers (or does not offer) to its full-time employees. IRS Notice 2016-4 extended the deadline for filing Form 1095-B, Health Coverage, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage from February 1, 2016 to March 31, 2016. The deadline for filing Form 1094-B, Transmittal of Health Coverage Information Returns, and Form 1094-C, Transmittal of Employer- Provided Health Insurance Offer and Coverage Information Returns, is extended from February 29, 2016 to May 31, 2016 for non-electronic filers and from March 31, 2016 to June 30, 2016 for electronic filers.

Communication is king. IFEBP has prepared the following list of questions and answers. These can be tweaked to fit any organization and it may even be a good idea to communicate these to employees before the questions start rolling in.

What is this form I’m receiving? A 1095 form is similar to a W-2 form. Your employer or insurer sends one copy to the IRS and one copy to each employee. While a W-2 form reports annual earnings, a 1095 form reports health care coverage throughout the year.
Who is sending it to me, when, and how? Your employer or health insurance company should send one to you either by mail or in person. They may send the form to you electronically if you gave them permission to do so. You should receive it by March 31, 2016.
Why are you sending it to me? The 1095 forms will show that you and your family members either did or did not have health coverage during each month of the past year. Because of the ACA, every person must obtain health insurance or pay a penalty to the IRS.
What am I supposed to do with this form? Keep it for your tax records. You don’t actually need this form in order to file your taxes, but when you do file, you’ll have to tell the IRS whether or not you had health insurance for each month of 2015. The Form 1095-B or 1095-C shows if you had health insurance through your employer. Since you don’t actually need this form to file your taxes, you don’t have to wait to receive it if you already know what months you did or didn’t have health insurance in 2015. When you do get the form, keep it with your other 2015 tax information in case you should need it in the future to help prove you had health insurance.
What if I get more than one 1095 form? Someone who had health insurance through more than one employer during the year may receive a 1095-B or 1095-C from each employer. Some employees may receive a Form 1095-A and/or 1095-B reporting specific health coverage details. Just keep these—you do not need to send them in with your 2015 taxes.
What if I did not get a Form 1095-B or a 1095-C? If you believe you should have received one but did not, contact the Benefits Department.

SOURCE: http://blog.ifebp.org/index.php/seven-questions-employees-will-ask-about-the-aca-1095s

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