If W-2’s are the Superbowl, 1095-C’s are March Madness

Employers are breathing a sigh of relief, with their W-2’s out the door and in the hands of employees who were seeking them to complete their tax returns.  Employers are used to the questions leading up to and surrounding W-2’s and how to file these through the FIRE system to the IRS.  It is an annual tradition of sorts, the Superbowl of required employee forms. For many companies, there is a rallying of the troops to get out the W-2’s and then a relishing in the victory once the task is complete.

1095C’s are another matter altogether…As a new form for employers and employees alike, this is unchartered territory.  Similar to complex March Madness basketball brackets, 1095-C forms can take “crazy” turns. An employer may have countless variations for their employees’ 1095-C line 14 and line 16 codes.  How can an employer then take steps to do some quality control on their ACA reporting?

Step 1:   Check and see if any employees have a blank line 16 code for any month of the year.  This signifies a month that the employer could be liable for a penalty.

Step 2:   If there is a blank in line 16 for a given employee, look back at their employment status and timeframe of their offer of benefits. This may uncover a data entry error or misclassification of the status of the employee.

Step 3:   Review the forms for code 1H in line 14.  This means that there was no offer of Minimum Essential Coverage for the month.  If code 1H is in a particular month, this should be paired with a code 2A or 2D in line 16 if the employer was offering full time employees coverage in alignment with the limited non assessment period.

MaxServices Group is committed to helping companies manage the March Madness of ACA reporting.