Form 1095-A
Form 1095-A refers to the Health Insurance Marketplace Statement. It is provided by the Health Insurance Marketplace (either Healthcare.gov or the equivalent state-based exchange) to all enrolled individuals. Most employees participating in a BEN360 ICHRA will receive a 1095-A. Exceptions include individuals enrolled in a health insurance plan not connected with the Health Insurance Marketplace (“off-exchange plan”). Employees should expect to receive their 1095-A in late January to early February of each year. BEN360 will provide instructions on how to access their form. It is typically submitted as part of the individual’s tax return. Employees should consult a tax professional should they need additional guidance.
Form 1095-A primarily applies to self-employed individuals or individuals who do not receive employer-sponsored benefits. It is used to reconcile Advanced Premium Tax Credits (individuals receiving premium subsidies from the government) or claim the Premium Tax Credit. Any employee participating in any group health insurance plan (including an ICHRA) is not eligible for either the Advanced Premium Tax Credit or the Premium Tax Credit.
Form 1095-B
Form 1095-B is a required IRS form that serves as proof of Minimum Essential Coverage. Under federal regulations, it is the responsibility of insurance “providers” to send out 1095-B forms. In the ICHRA context, the health insurance carrier that your employee has selected sends out the 1095-B notice. They are typically sent out in late January-early February. BEN360 will work with you to inform your employees that they should look out for this document and what to do if they haven’t received their 1095-B notice. Form 1095-B is typically submitted as part of an individual’s tax return. Employees should consult a tax professional should they need additional guidance.
The IRS created Form 1095-B to fulfill the requirements of the Affordable Care Act. That law requires Americans to have a basic level of health insurance in place, referred to as Minimum Essential Coverage. All employees that participate in a Benngi+ administered ICHRA satisfy this requirement.
Please be advised that if your employees opt out of your ICHRA plan and do not have Minimum Essential coverage, they may be subject to penalties and fines (especially employees living in California, the District of Columbia, Massachussetts, New Jersey, Rhode Island, and Vermont).
Form 1095-C
Form 1095-C is an annual IRS filing detailing Employer-Provided Health Insurance Offer and Coverage. It is only required for Applicable Large Employers (employers with 50 or more full-time equivalent employees). If you are required to submit Form 1095-C, BEN360 will alert you in January of each year and support you to prepare a draft 1095-C in advance of tax filing deadlines.
Form 1095-C determines if you have satisfied the Shared Responsibility Provision under the Affordable Care Act. Per IRS regulation:
Section 4980H generally provides that an applicable large employer is subject to an assessable payment if either (1) the employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage (MEC) under an eligible employer-sponsored plan and any full-time employee is certified to the employer as having received an applicable premium tax credit or cost-sharing reduction (section 4980H(a) liability), or (2) the employer offers its full-time employees (and their dependents) the opportunity to enroll in MEC under an eligible employer-sponsored plan and one or more full-time employees is certified to the employer as having received an applicable premium tax credit or cost-sharing reduction (section 4980H(b) liability). Section 4980H(c)(4) provides that a full-time employee with respect to any month is an employee who is employed on average at least 30 hours of service per week.