Small Businesses Sponsoring Self-Funded Health Plans and Self-Insured Retiree Health Plans Must Complete IRS Forms 1094-B and 1095-B

Small Businesses Sponsoring Self-Funded Health Plans and Self-Insured Retiree Health Plans Must Complete IRS Forms 1094-B and 1095-B

The headlines around Affordable Care Act (ACA) reporting requirements tend to focus on IRS Forms 1094-C and 1095-C.  The 1094-C/1095-C reporting requirements, however, only apply to applicable large employers who averaged 50 or more full-time employees including full-time equivalents during the preceding calendar year.  But, small employers (less than 50 full-time employees including full-time equivalents during the preceding calendar year) who sponsored a self-insured, or “level-funded,” health plan, as well as employers who sponsored a self-insured retiree health plan must complete IRS Forms 1094-B and 1095-B.

The “B series forms” are much simpler than the “C” series forms that applicable large employers must complete. The purpose of the “B series” reporting is to help the IRS know when particular individuals had private health insurance coverage during each year.  The IRS uses this information to verify people’s eligibility for individual market premium tax credits. It also helps the IRS tell who has met the Affordable Care Act’s individual mandate requirement, which is still being enforced for the 2018 tax year.

Employers that operate level-funded major medical plans and self-funded standalone retiree health plans need to send their coverage information into the IRS using Form 1094-B by February 28, 2019 if paper forms are used. Electronic submissions to the IRS must come in on or before April 1, 2019.

Form 1094-B is often referred to as a “cover sheet” form, and employers only need to submit the 1094-B to the IRS.  However, the 1094-B must be accompanied by copies of all of the employer’s Form 1095-Bs sent to covered individuals.

Information to be included on the Form 1094-B includes:

  • The company’s name, address, and employer identification number (EIN).
  • The name, address and taxpayer identification number (TIN) for each person responsible for the coverage. A TIN is more commonly referred to as a social security number, and they employer can list the responsible person’s date of birth if the TIN is not available. The primary subscriber usually is the responsible person for information reporting purposes. The responsible person can also be a related person, such as a parent or spouse who applied for coverage on behalf of a child.
  • The name and TIN (or date of birth if the TIN is not available), of each covered person and the months the individual was enrolled in coverage and entitled to receive benefits.

In addition to sending Form 1094-B information to the IRS each year, companies that offer level-funded health plans and self-funded standalone retiree health plans need to send a 1095-B statement to each “responsible individual” covered by the plan. This statement must include all of the information provided to the IRS via Form 1094-B, and it also needs to list a phone number for the company’s designated contact person so that the Form 1095 recipients can call with any questions.

Form 1095-B statements need to be delivered to responsible individuals by March 4, 2019.

One common question employers who are subject to these requirements ask is does a company even have to attempt to list the social security number for dependents?  Many employers wonder if they can simply list dates of birth for all dependents.  According to the IRS, the inclusion of the TINs for all covered individuals on Forms 1094 and 1095 is vital to their coverage verification process. Employer-sponsored plans and health insurance issuers must make and document reasonable attempts to obtain the TINs of all covered dependents in employer-sponsored plans or risk penalty liability.  If their efforts are unsuccessful, then they may report using the person’s date of birth instead.

Another question that often comes up is what kind of reporting is needed when an employer covers an individual through two self-insured health plans (like a level-funded plan with an FSA option) or through two plans where one component is fully-insured and the other is self-funded (like a fully-insured group plan paired with an HRA).  In those cases, then reporting is only required once, generally by the major medical plan involved. The example that the IRS gives in this case is if a self-insured major medical plan covers an individual and the same employer provides a Health Reimbursement Arrangement (HRA), then the employer is the provider of both types of coverage and only needs to report on the individual’s coverage through the major medical plan.  Similarly if one of the providers of coverage is a fully-insured major medical insurance carrier and the other is an employer operating an HRA, the fully-insured carrier will file the Form 1094-B with the IRS and send Form 1095-B statements to the responsible individuals.

If you are not sure if health information reporting requirements apply to your group benefit plan, please contact your Kistler Tiffany Benefits’ Employee Benefits Consultant to assist you.

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