Forms 1094-C and 1095-C
Deciphering Forms 1094-C and 1095-C: Navigating Healthcare Reporting to the IRS
Understanding Forms 1094-C and 1095-C
Forms 1094-C and 1095-C play a pivotal role in the reporting of essential healthcare information to the IRS, particularly in the aftermath of the Affordable Care Act (ACA). These forms are instrumental for Applicable Large Employers (ALEs) in communicating details about the health coverage offered to their employees and the enrollment status of those employees. Form 1094-C serves as a summary of this information for all employees, while Form 1095-C is filed for each full-time employee during any month of the calendar year, with a copy sent to the employee.
Employer Criteria for Filing Forms 1094-C and 1095-C
For an organization to qualify as an ALE, it must employ more than 50 Full-Time Employee Equivalents (FTEs). According to the ACA, any employee working more than 30 hours per week is classified as a full-time employee. The law further incorporates all hours worked by part-time employees with fewer than 30 hours each week into the final FTE calculation.
Formula for Calculating FTEs
The formula for determining FTEs is as follows:
Full Time Employee Count + {Total Part Time Hours/30}= FTE Total
Illustratively, consider an example where 20 employees work 32 hours per week, and 10 others work 20 hours per week:
20 FTEs+ {200/30}= 26.66 FTEs
This formula aids employers in accurately assessing their Full-Time Employee Equivalents, a crucial metric for determining ALE status and fulfilling reporting obligations under the ACA.