Level Funded vs. Self Funded Health Insurance
Are you thinking which health insurance option is right for your
The Affordable Care Act (ACA) implemented some new reporting requirements for employers and insurance carriers. In general, employers who are subject to the Employer Mandate complete one Form 1095-C for each full-time employee. Insurance carriers complete one Form 1095-B for anyone covered by a fully insured plan, and some smaller employers with a level-funded or self-funded plan may also need to complete Form 1095-B for anyone covered under the plan.
As part of the reporting requirements, a copy of Form 1095-B and/or Form 1095-C must be provided to the employee or insured individual(s). Copies of the forms must be distributed by January 31st of each year; however, the Internal Revenue Service (IRS) has in the past provided 30-day automatic extensions for the form distribution deadlines. Normally, a 30-day extension is only granted by making a written request to the IRS.
In recently proposed regulations, the IRS has indicated that an automatic 30-day extension to distribute Form 1095-B and/or Form 1095-C would be made permanently. No written request to the IRS would be necessary moving forward. This generally means the new due date to distribute copies of the forms will be March 2nd of each year (March 1st if it’s a Leap Year). If March 2nd falls on a weekend, then the due date is the Monday following March 2nd.
In addition, the proposed regulations would permanently allow Form 1095-B to be distributed only upon request. The employer or insurance carrier must post prominently on its website that Form 1095-B can be provided upon request, and the employer or insurance carrier must provide an email address, physical address, and phone number where the request can be made. Form 1095-B must be distributed within 30 days of the request. If meeting these requirements, then the employer or insurance carrier will not be subject to any penalty for failing to timely distribute copies of Form 1095-B. Form 1095-C still must be distributed to all employees.
The reporting deadlines for filing Form 1095-B and Form 1095-C with the IRS continues to be the same. If filing manually, the due date is February 28th. If filing electronically, the due date is March 31st. Reporting entities filing 250 or more forms must file electronically.
When the proposed rules are finalized, they will apply to the 2022 calendar year, but employers and insurance carriers may choose to apply them to the 2021 calendar year.
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