New 1095-C Forms for 2021 ACA Filings

By Tyler Shepherd, ACA Certified Analyst

New Year, New Forms!

In July of 2021, the IRS released an updated draft of the 1095-C Forms for 2022. With the IRS reporting deadline approaching in early 2022, it is important for employers to make note of a few updates to their employee 1095-C forms.

So what are 1094/1095-C Forms, and what is their purpose?

In 2010, the Affordable Care Act, or ACA, was enacted to make affordable health insurance available to more people. With the passing of the Affordable Care Act, all employers with 50 or more employees (known as Applicable Large Employers or ALE’s) are now required to offer health coverage to all eligible employees. This coverage information is submitted to the IRS via the 1095-C Form for each eligible employee, even if the employee chose not to enroll in an employer health plan. The 1095-C form includes employee-specific information, including:

• Employee’s first and last name
• SSN
• Full Address
• Employer name, Employer Identification Number (EIN), Employer Address, Employer Contact Phone Number
• Offer of coverage codes by month, Employee Monthly Contribution Amount, and Affordability Safe Harbor Code

Then what is the 1094-C Form?

The 1094-C Form, submitted at the same time as the employee 1095-C Forms, is used to submit employer information to the IRS, including:

• The total number of employees in an organization
• The number of 1095-C forms that are being filed for the tax year
• Employer name, Employer Identification Number (EIN), Employer Address, Employer Contact Phone Number
• Certifications of eligibility
• Minimum essential coverage offer indicator
• Any additional employer names associated with the ALE

So what’s new to the 1095-C Forms?

The IRS has added two additional codes to the 1095-C Form for 2022, which will apply to the 2021 reporting year. The new codes are 1T and 1U. The code 1T will apply when an Individual Coverage HRA (ICHRA) is offered to an employee and spouse without dependents, and plan affordability is determined by the employee’s ZIP code. The Code 1U will also apply when an ICHRA is offered to an employee and spouse without dependents, except plan affordability is instead determined by the ZIP code of the employee’s primary employment site. If an employer does not offer ICHRA coverage to it’s employees, then the new 1Tand 1U codes will not need to be used on the employee 1095-C Forms. Employers should note that the form codes first introduced during the 2020 tax year are still present in the 2021 forms, in addition to the new 1T and 1U codes.  

Source: https://blog.bernieportal.com/irs-releases-draft-2021-form-1095c