Affordable Care Act – Explained

The Affordable Care Act (ACA), adopted in 2010, is a comprehensive reform bill that provides health insurance coverage for uninsured full-time employees. The Act has numerous clauses that are in line with AMA policy and it can improve the healthcare system in the United States.

With the Affordable Care Act (ACA) aka Obamacare in place, certain employers are required to offer health insurance coverage to their full-time employees. These employers should send an annual statement to all the employees eligible for this coverage. The statement describes the insurance available for them. Internal Revenue Service (IRS) Form 1095-C is used as that statement.

Who should file Form 1095-C?

The ACA clearly defines which employers have to offer health insurance to their employees. ACA refers to them as “applicable large employers,” (ALEs). A company/organization is an ALE if it has a minimum of 50 full-time employees. A full-time employee, as per ACA, is someone who works a minimum of 30 hours/week. Only ALEs are required to file Form 1095-C.

What is 1095-C
An employee of an ALE who is eligible for insurance should receive form 1095-C. Eligible employees who decline to participate in employer-provided health plans will still receive a 1095-C. The form typically includes:

• Details of the employee and the employer.
• Months of the accounting year the employee was eligible for insurance.
• The cheapest premium cost that the employee could have paid.

1095-C will indicate the fact that if an ALE does not offer insurance coverage to its employees, then such ALEs may be subject to financial penalties.

When does 1095-B come into the picture?

Where 1095-C only describes what kind of insurance coverage was made available to a full-time employee, form 1095-B contains the details about the employee’s actual coverage, including the details of the employee’s family dependents that are included in this insurance coverage. Form 1095-B is sent out by the insurance provider and not the employer.

Some companies pay medical bills for their employees themselves, meaning they are self-insured

• For such cases, the employer is the insurance provider, so the employer will send out 1095-B forms.
• For such cases “B” and “C” forms can be combined and sent together by the employer.

When 1095-C is supposed to go
Since 2015, sending out 1095-C forms has been made mandatory. Employers have to send these out to their full-time employees and also to the IRS. Employees should receive Form 1095-C for the 2024 tax year before March 03, 2025.

Employers filing paper forms will have time till February 28, 2025, and if they are filing electronically, they have time till March 31, 2025. Employers filing more than 10 forms, must file the forms to the IRS electronically and those who are filing less than 10 forms have the option to file in paper or electronically. Dates have to be maintained strictly to avoid any kind of penalty from the IRS.