Employers offering Individual Coverage Health Reimbursement Arrangements (ICHRAs) must meet specific tax reporting obligations based on their size:
Small Employers
Employers with fewer than 50 full-time employees (or full-time equivalents) must file Forms 1094-B and 1095-B if offering self-insured ICHRAs to report minimum essential coverage (MEC).
- Form 1095-B: Provided to employees to report that the ICHRA satisfied MEC requirements.
- Form 1094-B: Summarizes and transmits all Forms 1095-B to the IRS.
Applicable Large Employers (ALEs)
Employers with 50 or more full-time employees (or full-time equivalents) must file Forms 1094-C and 1095-C to comply with the Affordable Care Act (ACA) and the employer shared responsibility provisions.
- Form 1095-C: Reports health coverage offers and affordability details for each full-time employee.
- Part II, Line 14: Use the appropriate ICHRA offer code (e.g., "1L" for employee-only coverage, "1M" for employee + dependents, etc.).
- Part II, Line 15: Enter the employee's required contribution for the lowest-cost self-only silver plan premium minus the ICHRA contribution.
- Part II, Line 16: Include the appropriate affordability safe harbor code, if applicable.
- Form 1094-C: Serves as a summary transmittal for all Forms 1095-C and is used to determine whether the ALE met its employer shared responsibility obligations under Section 4980H.
Filing Deadlines
Employers must adhere to the following filing deadlines for Forms 1094 and 1095:
- January 31: Provide Form 1095-B or 1095-C to employees.
- February 28: Submit paper filings to the IRS.
- March 31: Submit electronic filings to the IRS.
Salusion's Role in ICHRA Tax Reporting
Salusion simplifies ICHRA tax reporting with proactive reminders and data support:
Form 1094 & 1095 Reporting
- In early January, Salusion emails employers a reminder to prepare Forms 1095-B or 1095-C for employees. An Excel file with key reporting details, including ICHRA offer codes, required contribution amounts, and affordability safe harbor codes, is provided to streamline data entry.
- The reminders include guidance for filing Form 1094-B or 1094-C with the IRS to ensure compliance with ACA regulations.
