Cobra Retiree 1095-C Form Questions Answered
In a recent webinar on mastering ACA 1095-C forms, we found out just how many questions our attendees had about this new and complicated process, especially as it relates to COBRA retirees. Below we have addressed some of the most common COBRA retiree 1095-C form questions.
Are we responsible for reporting COBRA coverage when it is outsourced?
If you are fully-insured employer, your insurer or plan sponsor is responsible for reporting COBRA coverage under section 6055. If you are a self-insured employer, you are responsible for reporting COBRA coverage under section 6055, even if you use a TPA for your COBRA administration.
What are the 1095-C Cobra codes for retirees?
For Part II of form 1095-C, line 14, code 1G would be used for COBRA beneficiaries. Lines 15 and 16 are not required.
Do you have to report for individuals who are on COBRA? What premium amount should be used since they pay 100% of the premium if they need to be reported on?
If you are a self-insured employer, you must complete section 6055 reporting for anyone enrolled in your COBRA coverage. If using form 1095-C for COBRA reporting, you would enter codes 1G and 2A in part II lines 14 and 16, respectively. Line 15 is not required as affordability is not assessed for COBRA individuals.
Do retirees who receive health insurance benefits need form 1095-C as they are not working?
If you are a self-insured employer, section 6055 reporting is required for both retirees and COBRA participants, and the forms used for this reporting (either forms 1094 and 1095-B or form 1095-C) must be furnished to the IRS and the individuals to satisfy the individual mandate.
We were told by an employment law firm that COBRA/retirees had to report on a 1095-C for when they were active, but if they continued coverage, you would use a 1095-B form as the entity that offered the MEC.
That is correct. If you are a self-insured employer offering COBRA/retiree coverage, you have the option to use either form 1095-B or form 1095-C for reporting their COBRA/retiree coverage as the entity providing MEC.
Is reporting for COBRA and retirees optional?
All 6055 and 6056 reporting for the 2014 tax year is optional (including active and COBRA/retiree employees). The webinar refers to the use of form 1095-C as being optional for 6055 reporting for COBRA/retiree individuals by self-insured employers, as forms 1094 and 1095B can also be used for this purpose. Visit the IRS.gov for more information on COBRA retiree reporting and eligibility.
I thought the IRS clarified the option was to use 1095-C OR 1095-B for retirees and COBRA enrollees in a self-funded plan, not that you don’t have to report them at all.
As was specified in the webinar, this reporting is only optional for the 2014 tax year. For 2015 forward, COBRA/retiree coverage for self-insured employers is required, with the option to use form 1095-B or form 1095-C for reporting.
To view the forms and instructions for filling them out follow the links below:
- Form 1094-B
- Form 1095-B
- Form 1094-C
- Form 1095-C
- Instructions for filling out 1094-B and 1095-B
- Instructions for filling out 1094-C and 1095-C
Need help with ACA Reporting? Visit our ACA Compliance page to learn how Tango Health can help.
Categorized in: ACA