AGC Letter Prompts IRS to Clarify ACA Reporting Requirements for Multiemployer Plans
The Internal Revenue Service (IRS) on August 6 issued an updated Form 1095-C and instructions following a June 9 letter from AGC of America and the Food Marketing Institute urging the agency to make the revisions. Form 1095-C is one of the forms used by employers to report information regarding the cost and level of health coverage offered to employees under the employer mandate provisions of the Affordable Care Act (ACA). The form allows the IRS to verify whether an employer is subject to penalties under the employer mandate provisions of the ACA. A draft version of the updated form and instructions are available on the IRS website.
In order to enforce the employer mandate, the ACA requires large employers to file an information return with the IRS regarding health coverage offered to full-time employees beginning on January 1, 2015. Together, IRS Forms 1094-C and 1095-C constitute the information return. Form 1094-C is a transmittal form requiring information about a large employer’s corporate structure and payroll. Form 1095-C requires information for each full-time employee (one form per employee) regarding the cost and level of health coverage offered, if any.
When the IRS initially released Form 1095-C and its accompanying instructions, it was unclear how an employer should report coverage offered through a multiemployer plan. The initial instructions to Form 1095-C indicated that an employer should report, on Line 14, whether or not a bargaining unit employee was actually eligible for coverage in a multiemployer plan. The form required this information even if the employer qualified for a safe harbor under the “multiemployer interim rule” and reported this on Line 16. This made Form 1095-C confusing, since the very reason the IRS issued the “multiemployer interim rule” – which AGC played a key in securing – was to provide relief to employers offering coverage through a multiemployer plan because they generally do not have information on employee coverage.
To address this discrepancy in Form 1095-C, the IRS updated the instructions by clarifying that an employer relying on the “multiemployer interim rule” on Line 16 (by entering Code 2E) does not need to report an employee’s eligibility for coverage on Line 14. Rather, the IRS instructs such an employer to enter the code for “no offer of coverage” (Code 1H) on Line 14 regardless of whether the employee was eligible to enroll in coverage under the multiemployer plan. This update will substantially simplify the reporting process with respect to multiemployer plans in 2015.
For additional ACA resources, visit AGC’s members-only webpage at www.agc.org/ACA.
Editor’s Note: The content of this article was heavily contributed by the attorneys of Susanin, Widman and Brennan, lawyers in the areas of labor and employment law, employee benefits, and construction law. This information should not be relied upon as legal advice.
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