February is coming to a close, which means the first reporting deadline for applicable large employers (ALE) is around the corner. Legislation permanently pushed the deadline for employee distribution of 1095-C forms to March 1, and reduced the number of forms eligible for hard-copy IRS filing, meaning virtually all employers will need to file their 1094-C and 1095-C electronically in 2024. The electronic filing deadline is March 31.

By way of background, all employers with 50 or more full time and equivalent employees are required to offer ‘affordable’ coverage that meets minimum essential coverage (MEC) and minimal value (MV) to all (or 95%) of their full time employees. Forms 1095-C are required for every full time employee that was employed for even one calendar month in the reporting year. Form 1094-C serves as a cover sheet for the IRS filing of the 1095-C forms, providing specific employer and plan details to the IRS.

In addition to the IRS filing, several states* have enacted individual mandates requiring employers to file the 1095-C forms for resident employees with the respective state agencies.

It is recommended that employers enlist a vendor to complete, furnish, and file the 1095-C and 1094-C forms. While the responsibility to accurately report employee and plan data rests with the employer, using a third party administrator such as a current payroll provider generally streamlines the process and assists employers in meeting their reporting obligations.

*As of the 2023 reporting year, California, Washington D.C, Massachusetts, New Jersey, Rhode Island and Vermont have individual mandates requiring residents to carry health coverage for themselves and their dependents. Vermont does not impose a financial penalty for failure of a resident to comply.