ACA Form 1095C: The Important Document No One is Talking About

In our office and with our clients, we talk a great deal about the Affordable Care Act. Still, with all the discussion on what employers need to know, there is an area that no one seems to be talking about – the new 1095C form.

What is it?
The 1095C form is a new tax document that millions of Americans will be receiving for the first time. This new government form tells the IRS that you were eligible for insurance coverage under the ACA and whether or not took advantage of or waived this coverage.

Will all taxpayers receive this form?
No. You will only receive this form if you were an eligible employee who worked for a company with a total of 100 or more Full-Time or Full-Time Equivalent (FTE) employees in 2015.

What is an eligible employee?
Any employee that is determined to be “full-time” would be eligible. Full time status is determined by the total amount of hours an employee works. Under ACA, any employee who at least 30 hours of service per week or 130 hours in a calendar month (when working flexible/varied hours) would be considered full-time and would therefore be eligible for employer-sponsored insurance coverage.

Why do I need to know?
If you are determined to be an eligible employee under the ACA, you need to be aware that you will be receiving this form as you will need it when filing your 2015 tax returns.

Why is it important?
Your employer will submit this insurance coverage information to the IRS and if you fail to disclose a waiver of coverage, you may be flagged for review/audit by the IRS and face possible penalties greater than the ACA individual mandate penalty. In 2015, this penalty is the greater of $325 per uninsured person or 2% of household income over the filing threshold.

What do I do with it?
If you work with a tax preparer for submitting your 2015 returns, you will need to have this form with you when you go to your appointment. If you choose to do your own taxes using TaxAct, TurboTax or something similar, you will need to keep this document with your tax records in case of any further inquiry/audit by the IRS.

If you are an employer who must be in compliance with ACA in 2015 and beyond, it’s important that not only you – but also your employees – are aware of the changing regulations and requirements year-over-year. 

The IRS website is also a phenomenal resource in trying to navigate the extremely complex ACA legislation for both employers and employees (visit https://www.irs.gov/Affordable-Care-Act).

Have more questions? Visit our blog for common misconceptions on ACA (http://qualitybsolutions.net/blog/understanding-aca-5-common- oumyths-and-misinterpretations/) or contact us directly and let our team of experts help you stay compliant!