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Form 1095-C Part II Filing Guide

Answer the questions below to help you better understand what codes to enter in Lines 14-17 of Form 1095-C. Please note that this information covers common scenarios and is not all-inclusive.

Greatland Corporation does not provide tax, legal or accounting advice. This document has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Minimum Essential Coverage

Minimum Essential Coverage (MEC) includes employer-sponsored coverage, individual policies purchased directly from an insurance company, individual policies purchased through the Health Insurance Marketplace and some government-sponsored health care coverage. An individual coverage HRA is a self-insured group health plan and an eligible employer sponsored plan. See the following link below for a list of plans that are considered to provide MEC.

Learn more at irs.gov.

Minimum Value

Under the Employer Mandate of the Affordable Care Act, employers with 50 or more full-time employees (including full-time equivalent employees) must provide employees and their dependents with Minimum Essential Coverage that provides Minimum Value. A plan is considered to provide Minimum Value if it pays at least 60% of the costs of benefits for a standard population, and provides substantial coverage of inpatient hospitalization services and physician services. An individual coverage HRA that is affordable is treated as providing Minimum Value. Typically, an insurance provider or Third Party Administrator can verify if the coverage meets Minimum Value requirements. In addition, Health and Human Services has developed a Minimum Value calculator which can be used to determine if a plan meets this requirement.

Download the minimum value calculator from cms.gov.

Conditional Offer

A conditional offer is an offer of coverage that is subject to one or more reasonable objective conditions (for example, an offer to cover an employee's spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer). An Applicable Large Employer (ALE) may report a conditional offer to a spouse as an offer of coverage regardless of whether the spouse meets the reasonable objective condition.

Is the Employee Required Contribution for a 2023 calendar year plan $103.28 or less?

An employer may enter code 1A on Line 14 of Form 1095-C if the employer made a qualifying offer to the employee. A qualifying offer is an offer of Minimum Essential Coverage (MEC) providing Minimum Value offered to a full-time employee with the Employee Required Contribution not exceeding 9.61% (for 2023 calendar year plans) of the mainland single federal poverty line (FPL) and at least MEC offered to the employee’s spouse and dependents. If code 1A is entered on Line 14 of Form 1095-C, no entry is required on Line 15. 9.61% of the monthly mainland single FPL for 2023 calendar year plans = $103.28 (Calendar year plans use the prior year FPL amount since this amount is updated in late January each year.) For non-calendar year plans: Enter 1A for any months in the 2022 plan where the Employee Required Contribution is $105.51 or less; enter 1A for any months in the 2023 plan where the Employee Required Contribution is $108.83 or less.

Employee Required Contribution

The Employee Required Contribution is the employee's share of the monthly cost for the lowest-cost self-only minimum essential coverage providing minimum value that is offered to the employee by the Applicable Large Employer (ALE). The Employee Required Contribution may not be the amount the employee paid for coverage. For additional rules on determining the amount of the Employee Required Contribution, including for cases in which an ALE makes available certain cafeteria plan contributions, wellness program incentives, and opt-out payments, see Notice 2015-87.

For an employee offered an individual coverage HRA (ICHRA), the Employee Required Contribution is the excess of the monthly premium for the applicable lowest cost silver plan based on the employee’s applicable age over the monthly ICHRA amount (generally, the annual ICHRA amount divided by 12).

Individual Coverage Health Reimbursement Arrangement (ICHRA)

An HRA is a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. An ICHRA is an HRA integrated with individual health insurance coverage or Medicare, subject to certain conditions. For more information, see Health Reimbursement Arrangements (HRAs).

ICHRA Affordability

An employer may use the cost of self-only coverage for the lowest cost silver plan for the employee offered through the Exchange where either the employee’s primary residence is located or where the employee’s primary site of employment is located, if using a safe harbor, for determining whether an offer of an ICHRA to a full-time employee is affordable.