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ACA Forms 1094 and 1095 Released for 2021

December 13, 2021

The IRS has released final Forms 1094 and 1095, and related instructions, for the 2021 tax year. These Forms are to be filed in early 2022 by applicable large employers and providers of minimum essential coverage, including self-funded plan sponsors.

  • Form 1094-C and Form 1095-C (and related instructions) are to be used by applicable large employers (ALEs) to report whether an offer of health coverage was made to each full-time employee, and, if so, information about the offer of coverage. ALEs that sponsor self-funded health plans will include information on which employees and dependents were covered during each month of the year.
  • Form 1094-B and Form 1095-B (and related instructions) are to be used by entities that are not applicable large employers, yet are providers of minimum essential coverage. This includes insurance carriers and self-funded employers that are not ALEs.

Filing Deadlines

The most significant change effective for this filing year is that individual statements must be provided by January 31, 2022. In all prior years, the IRS had extended this deadline by 30 days. However, in 2019 the IRS requested comments as to whether this relief was still necessary, and, if so, why. Very few comments were submitted, which indicated to the IRS that this relief was no longer necessary. The IRS then renewed its request for comments in 2020 and indicated that unless it received comments that explained why this relief continues to be necessary, no relief related to the furnishing requirements would be granted beginning with the 2021 statements.

As with prior years, IRS returns must be filed by February 28, 2022 or March 31, 2022, if filed electronically.

No More Good Faith Relief

The IRS also stated last year would be the final year that they would provide relief from penalties for filing incorrect or incomplete Forms for those entities that could show they made good faith efforts to comply.

Minimal Changes to Form 1095-C

The 2021 Form 1095-C is almost identical to the 2020 version. However, there are two additional codes that can be used on Line 14, relative to the offer of coverage made to an employee. The additional codes are both related to offers of an Individual Coverage Health Reimbursement Arrangement (ICHRA).

Important Reminders

There were a handful of changes that began with the 2020 statements. For your convenience, we have listed these changes below:

  • The “Plan Start Month” box in Part II is now a required field and may not be left blank. Employers should enter the two-digit number (01 through 12) indicating the calendar month during which the health plan year began in which the employee was offered coverage (or would be offered coverage if the employee were eligible).
  • There is now a field in Part II to enter the employee’s age on January 1, 2021. This field is only to be completed if the employee was offered an ICHRA.
  • A new line has been added to Part II. Line 17 asks for the zip code used by the employer to determine affordability for those employees who were offered an ICHRA. It should be left blank if the employee was not offered an ICHRA.

What Is an ICHRA?

An ICHRA is a type of Health Reimbursement Arrangement (HRA). It allows employers to reimburse the cost of individual market premiums on a tax-preferred basis, subject to certain conditions, as an alternative to traditional group health plan coverage. ICHRAs became available on January 1, 2020.

For more information on ICHRAs, reach out to your Hylant representative.

The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions.

Author Holly Wahl, Hylant Vice President, Employee Benefits Compliance Leader

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