By - July 30, 2020

2020 Changes Coming for Form 1095-C

On July 13, 2020, the Internal Revenue Service (IRS) provided a draft that shows changes to the tax forms for 2020. Rest assured Tango is reviewing and preparing to comply with the changes.

The 1094-C form that gets transmitted to the IRS and shows the overall compliance for an EIN remains the same. However, there have been several changes to the 1095-C form that gets distributed to employees. The major changes are a result from adding Health Reimbursement Accounts (HRA), the individual coverage HRA or ICHRA, but also the addition of the employee’s age and a cosmetic adjustment that may cause surprise to employees upon first glance

Below are the changes included in this draft version of the 2020 Form 1095-C:

  • New data fields on Form 1095-C include “Employee’s age on January 1”, zip code (primary residence or primary employment), and by month
  • Part III, which for self-insured coverage lists the employee and dependents who were enrolled in coverage, is now moved to Page 3 (instructions are moved to Page 2). This may necessitate a communication ahead of time so employees are not surprised. For Tango Clients, your Client Manager can assist with this as a part of 2020 tax year planning.
  • Eight new Line 14 offer codes have been created to accommodate ICHRA offers and new affordability safe harbors. Starting January 1, 2020, employers may offer employees an ICHRA instead of offering a traditional group health plan to reimburse medical expenses, like monthly premiums and out-of-pocket costs such as co-payments and deductibles. All health plans must continue to follow ACA regulations of affordability and meeting minimum value. A series of new Line 14 codes, 1L through 1Q, allows employers to report the type of ICHRA covered. Tango Clients, your Client Manager will be contacting you to see if this applies to you.

Exactly how these new fields and codes will be used in conjunction with other information on the Form 1095-C is not yet clear, however this should be explained when the draft 2020 Instructions for Forms 1094-C and 1095-C are published.


2020 1095c p2
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