Form 1094-C

What is ACA Form 1094-C?

ACA Form 1094-C is part of the reporting requirements under the Affordable Care Act (ACA) for certain employers in the United States. This form serves as a transmittal form for Form 1095-C, which provides detailed information about health insurance coverage offered to employees. Employers that are considered Applicable Large Employers (ALEs) are required to submit this form to the Internal Revenue Service (IRS). ALEs are typically those with 50 or more full-time employees (including full-time equivalent employees). The information provided in Form 1094-C helps the IRS determine whether an employer might be liable for a penalty under the ACA's employer mandate, and it also aids in the administration of the premium tax credit for employees purchasing coverage through the Health Insurance Marketplace.

What is the difference between Forms 1094-C & 1095-C?

Form 1094-C and Form 1095-C are both used in the reporting requirements for the Affordable Care Act (ACA), but they serve different purposes:

• Form 1094-C: This is the transmittal form used by Applicable Large Employers (ALEs) to submit information to the IRS about their compliance with the ACA's employer mandate. It is essentially a cover sheet that summarizes the aggregate employer-level data, including the number of full-time employees, and is used in conjunction with Form 1095-C.
• Form 1095-C: This form provides detailed information about the health insurance coverage offered to each individual full-time employee. It includes information such as the type of coverage offered, the employee's share of the lowest-cost monthly premium, and the months when the coverage was available. Form 1095-C is provided to both the IRS and the individual employees, and it helps the IRS determine whether the employee, as well as the employer, has complied with the individual and employer mandates of the ACA.

In summary, Form 1094-C provides a summarized view of an employer's compliance with the ACA's requirements, while Form 1095-C provides detailed information about the health coverage offered to individual employees. Form 1094-C acts as a cover sheet accompanying Form 1095-C during the submission process to the IRS.

What happens when an employer or ALE does not file 1094-C/1095-C on time?

If an Applicable Large Employer (ALE) does not file ACA Forms 1094-C and 1095-C on time, or if the forms are filed with incorrect information, the employer may face penalties. Here's what might happen:

1. Penalties for Late Filing: If the forms are filed after the deadline then, the penalty is typically $310 per return.
2. Penalties for Incorrect Information: If there are errors on the forms, the ALE might face additional penalties. There is a window of time to correct the errors to reduce or eliminate the penalties, depending on when the corrections are made.
3. Potential Additional Consequences: Failing to comply with the ACA's reporting requirements might also make it more challenging for the IRS to determine whether the employer has met the ACA's employer mandate. This could lead to additional assessments if the IRS determines that the employer did not offer appropriate coverage to full-time employees.
4. Potential Impact on Employees: The lack of timely and accurate reporting might also affect employees' ability to demonstrate that they had the required minimum essential coverage, which could lead to challenges for them when filing their individual tax returns.

The ACA penalties can add up quickly, especially for employers with many employees. Therefore, it's in the best interest of the ALE to comply with the reporting requirements and file the necessary forms accurately and on time.

How do employers file 1094-C?

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How to Correct a Mistake on Form 1094-C

1. Identify the Error: First, pinpoint the exact error on the original Form 1094-C that needs correction.
2. Prepare a Corrected Form: Obtain a new Form 1094-C and complete it with the correct information. Refer to the specific IRS instructions for Form 1094-C for details on how to fill out the corrected form.
3. Mark the Corrected Form: In the designated area on the form, indicate that it is a corrected submission. This typically involves checking a specific box on the form.
4. Submit the Corrected Form: File the corrected Form 1094-C with the IRS. The process for submitting the corrected form will be the same as the initial filing, whether electronically through the Affordable Care Act Information Returns (AIR) system or via paper filing.
5. Re-Submit Associated Form 1095-C If Needed: If the error on Form 1094-C also affects any of the associated 1095-C forms, those will need to be corrected and re-submitted as well.
6. Maintain Records: Keep a copy of the corrected form and any related correspondence with the IRS for your records.
7. Consult a Professional If Needed: If the error is complex or you're unsure about how to correct it, consider consulting a tax professional or legal advisor with experience in ACA compliance. They can guide you through the process and ensure that the correction is handled properly.

By taking prompt action to correct an error on Form 1094-C, you can minimize the risk of penalties and ensure that the information reported to the IRS is accurate. It's always advisable to review forms carefully before submitting them to avoid errors in the first place.

Who should employers send their ACA forms to?

1. To the Internal Revenue Service (IRS):
   • Form 1094-C: This serves as a transmittal form for Form 1095-C and must be submitted to the IRS.
   • Form 1095-C: This provides detailed information about health insurance coverage and must also be sent to the IRS.
   • The submission method can be either electronic through the IRS's AIR system or via paper mailing, depending on the number of employees and forms you are filing.
2. To Your Employees:
   • Form 1095-C: A copy of this form must be provided to each full-time employee, as it contains essential information about their health coverage. This can typically be sent through mail or electronically, if the employee has consented to electronic delivery.
3. To Your Insurer or Third-Party Administrator (If Applicable):
   • If you are working with a third-party provider for ACA compliance, you may also need to send them copies of the forms or related information.

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