So you are ready to generate your 1095-C’s? Great. First thing to do is get the latest version of the HR program. Use the Check for Updates option on the Tools menu to see if you need to download an update.
At the time of this writing, the current version is 7.52.278. (Use the Help->About option to see what version you are currently running.) The 7.52.278 version includes the logic needed for compiling 1095-C data based on the lookback measurement period method. (The logic for the monthly measurement period has been in place with some minor changes made in the last couple of weeks, so you should get the current version.)
If you re-generate the 1095-C information later, use the Check for Updates option again just to make sure there haven’t been any corrections or enhancements that you may need before you re-compile the data.
The actual workflow itself to prepare the 1095-C information:
- Review your data including medical plan and category setup to make sure the correct series 1 and 2 codes will be reported (see prior “preparing for 1095-C reporting” blog posts for items too look at)
- Use the Compile 1095-C Information option under ACA->Annual Reports
- Review the results using the 1095-C Reports option (also under ACA->Annual Reports)
- Make adjustments as needed to payroll checks, benefit records and employee accounts
- Repeat step 2-4 until you are satisfied with the results
- Make any manual edits to line 16 codes that you determine are needed. (Do not perform any manual edits if you will be using the Compile 1095-C option again, otherwise these changes will be lost and you will need to make the edits again.)
- Perform a final review of 1095-C forms
- Print 1095-C forms for employees
- Issue corrected 1095-C to employees if any errors are found
- Wait to file your 1095-C and 1094-C forms with the IRS until you are reasonably sure no more corrected 1095-C’s need to be send to employees. It is going to be easier to issue a corrected 1095-C to the employee only rather than having to issue the corrected 1095-C to both the employee and the IRS as well.The deadlines for filing with the IRS have been extended so you have plenty of time to wait, especially if you will be filing electronically.
Reviewing the Results
After compiling the 1095-C information, you can use the 1095-C Reports option to print a report with the line 16 codes. If you made an offer of coverage to an employee, this will be reported on line 14 (using the series 1 code defined in your medical plan offered to all employees). In general, if you are reporting an offer of coverage was made, no penalties will apply.
If no offer of coverage was made, then line 16 explains to the IRS why no penalty should apply. If no offer was made and no code is reported for a month on line 16, then a penalty might apply–but several other conditions must be met. The employee must have enrolled in coverage on the exchange for that month, the employee must have received a subsidy for that coverage, and the employee must have been eligible to receive that subsidy.
The 1095-C Reports window includes some options to help narrow down your review. First, you will probably only want to review employees that were full time in one or more months. Employees that were not full time in one month do not need to receive a 1095-C, but the information is compiled anyway. (Compiling the information is necessary to determine full or part time status. Having the 1095-C information compiled is also helpful in case you ever need to demonstrate that an employee was not supposed to receive a 1095-C.)
There is also an option to only print employees that have a missing line 16 code in one or more months. That is a good starting point to review the information, since you may be concerned with employees that have no code.
The final option is to print employees that don’t have an offer code. In other words, line 14 contains a “1H” code for the month that has a blank line 16 box.
The report can be run with just the line 16 codes (one line per employee) or with both the line 14 and 16 codes (two lines per employee).
After generating the report, use the transaction # that to view the 1095-C on the Enter/Edit window and review the information on the employee account. We will take a look at the information available on the Enter/Edit window in the next post.