In early 2016, employers with at least 50 full-time employees (FTEs) must provide Forms 1095-C to their FTEs and to the IRS. This new requirement applies to both insured and self-insured medical plans. The forms require, in part, tracking per month in 2015 per FTE:
- the tier of health plan coverage offered, if any (e.g., employee-only, employee + spouse, or no coverage offered);
- the self-only premium an employee must pay for the lowest-cost plan that provides minimum value; and
- the reason why an employer would not be subject to a penalty for a particular month (e.g., employee is in a waiting period or the affordability safe harbor applies).
In addition, self-insured plans will need to track and provide a Form 1095-C to the primary covered employee (FTE and non-FTE) or individual (e.g., retiree or COBRA qualified beneficiary) reflecting coverage under the self-insured plan for each month of the calendar year (including coverage of each family member).
This individualized tracking generally requires the assistance of an outside vendor. There are payroll providers, benefit administration vendors, and independent vendors providing this service. Employers with payroll vendors and/or benefit administration vendors currently in place may still need to purchase this service in addition to what they already have. Implementation can take up to 3 months. Some vendors are no longer accepting new clients. Therefore, USI recommends that employers prepare ASAP if they have not already. Waiting until the last quarter of 2015 may make compliance impracticable. Please contact your USI representative for additional information.